Socio Economic Impact of Leather Industry in Bangladesh: An Empirical Study

Abstract

The leather industry is one of the most prospective industries in Bangladesh. This sector occupies an important position in relation to the other manufacturing sectors in terms of gross output, high value addition, employment generation, poverty alleviation, income generation and a socio-economic benefactor for the country. It has enough scope for both vertical and horizontal expansion in terms of economic return and social benefits. The leather industry of Bangladesh is the largest foreign exchange earner of the country, contributing 8% of total export earnings. However, there is little systematic research into this sector. This study addressed the research gap by seeking to understand how leather industry contributes to socio economic development in Bangladesh. A number of studies have addressed economic, social, and community development issues of leather industry in Bangladesh. However, few have combined these constructs (i.e. economic, social, and community development) into a theoretical framework that can be used to assess the impact of a leather industry in Bangladesh. This study developed a Conceptual framework as a model to assess the social and economic impact of leather industry in Bangladesh. Cross-sectional exploratory quantitative and qualitative approaches were used for this study. A semi-structured questionnaire survey was used to collect data from over 400 participants in various tanneries in Bangladesh. The data were analyzed by using the Partial Least Squares (PLS) method, a statistical analysis technique based on the Structural Equation Model (SEM). The study found that service and facility (t = 15.7547, β = 0.6599, p < 0.05) and social security (t = 5.5610, β = 0.2730, p < 0.05) had positive influence on social impact of leather industry in Bangladesh, while working environment (t = 0.6281, β = 0.0409, p > 0.05) and health security (t = 0.0264, β = 0.0023, p > 0.05) had no significant effect on social impact of leather industry in Bangladesh. It was also found that wages and productivity (t = 6.1996, β = 0.2802, p < 0.05), employment impact (t = 14.3071, β = 0.6198, p < 0.05) and personal income (t = 2.1532, β = 0.1561, p < 0.05) had positive influence on economic impact of leather industry in Bangladesh, while job security (t = 1.4186, β = 0.0913, p > 0.05) had no significant effect on economic impact of leather industry in Bangladesh. The findings of the present study will contribute to the development of strategies and policies for leather industry in Bangladesh. In addition, the Conceptual Model developed in this study can be easily adapted for studying socio economic impact of leather industry or other industry in developing countries.