Enhancing small and medium-sized enterprises’ sustainability in global value chains: The impact of multinational corporations on Bangladesh’s garment industry

This paper presents a detailed investigation into the influence of multinational corporations (MNCs) on the sustainability practices of small and medium-sized enterprises (SMEs) operating within Bangladesh’s garment industry, an integral part of global value chains (GVCs). Drawing on empirical data from 65 SMEs in Bangladesh and complemented by secondary data from the Asian Development Bank (ADB), the study employs advanced regression and correlation analyses to unravel the dual-edged effect of the MNC-SME relationship. The findings reveal that while MNC support positively affects SMEs’ sustainability initiatives, the stringent sustainability requirements exacerbate operational inefficiencies, creating a paradox where sustainability initiatives contribute to both growth and constraint. The research concludes that for MNC-driven sustainability efforts to be truly effective, a more balanced and collabourative approach is necessary, one that addresses the unique resource constraints faced by SMEs in emerging markets. This study offers valuable insights into the evolving discourse on sustainability within GVCs, highlighting the strategic role of MNCs and their influence on the sustainability and competitiveness of SMEs in developing economies. • The study explores the dual role of multinational corporations (MNCs) in influencing sustainability practices among small and medium-sized enterprises (SMEs) in Bangladesh’s garment industry. • Empirical data from 65 SMEs show that while MNCs provide essential support, their stringent sustainability requirements can increase operational costs and complexities for SMEs. • The study employs multiple linear regression and correlation analysis to quantify the impact of MNC-driven sustainability initiatives on SME competitiveness. • Findings suggest that effective MNC support, including training and resources, enhances sustainability adoption, but compliance pressures may hinder long-term viability for SMEs. • Recommendations highlight the need for more balanced and collaborative approaches between MNCs and SMEs to ensure sustainable growth in global value chains.