Export Diversification and Network Effects: Evidence from a SAM-Based Analysis of Bangladesh

Abstract

This study examines how the allocation of export expansion across sectors affects economy wide outcomes in Bangladesh. Using a Social Accounting Matrix (SAM) framework, we combine linkage analysis with simulation to evaluate how sectoral export growth propagates through the production network. The results show that the impact of export diversification depends critically on sectoral allocation rather than export intensity alone. While aggregate differences between scenarios are modest, reallocating export growth toward sectors with stronger intersectoral linkages generates larger economy-wide gains in GDP and labor income. In particular, sectors with low initial export shares but high network connectivity—such as agriculture, hunting, forestry, and fishing; retail trade; other community,socialandpersonalservices; andinlandtransport—producestrongermultiplier effects than most export-intensive sectors. These findings highlight a key distinction between export intensity and network centrality, demonstrating that sectors with limited direct export participation can play a central role in transmitting economic gains. The results provide a network-based perspective on export diversification and offer policy-relevant insights for designing strategies that promote more inclusive and efficient economic growth.