Determinants of Competitiveness of Garment Industry in Ethiopia—An Empirical Study

Abstract

The objective of this study is to identify the factors that determine the competitiveness of garment industry in Ethiopia. To achieve this, Porter's diamond model of national competitiveness was detected as a model to assess the competitiveness of the garment industry in Ethiopia. Based on conceptual framework, the study's six hypotheses were developed and tested. Six independent variables considered are: factor conditions; demand conditions; related and supporting industries; industry's strategy, structure and rivalry; role of government; and chance factors and dependent variable is competiveness. Primary data are collected by self-administered structured questionnaire from owners/general managers of industry. Totally 37 out of the targeted 38 respondents duly filled and returned the questionnaires for analysis giving response rate of 97.36 per cent. The results were presented in forms of mean, standard deviation, Pearson correlation, ANOVA and regression analysis. This study finds that the composite the five independent variables accounted for 73 per cent variance for the competitiveness of garment industry in Ethiopia. The independent variables show the positive effect on predicting the dependent variable (except the demand conditions). Two factors --factor conditions and chance factors --were found to be statically significant determinants for the competitiveness of the garment industry in Ethiopia.