Working conditions and factory survival: Evidence from better factories Cambodia

Abstract

Working Conditions and Factory Survival: Evidence from Better Factories Cambodia * A large and growing literature has identified several conditions, including exporting, that contribute to plant survival. A prevailing sentiment suggests that anti-sweatshop activity against plants in developing countries adds the risk of making survival more difficult by imposing external constraints that may interfere with optimizing behavior. Using a relatively new plant-level panel dataset from Cambodia, this paper applies survival analysis to estimate the relationship between changes in working conditions and plant closure. The results find little, if any, evidence that improving working conditions increases the probability of closure. In fact, some evidence suggests that improvements in standards relating to compensation are positively correlated with the probability of plant survival.

And roses too: How “Better Work” facilitates gender empowerment in global supply chains

“…Over the past 10 years there has been a growing body of research on the impact of BW in its program countries, particularly in Cambodia. The research has primarily used audit data to examine, for example, the impact of BW on wages (Robertson, 2011), factory survival (Brown et al., 2011), human resource innovation (Robertson et al., 2011), verbal abuse (Rourke, 2014), sexual harassment (Lin et al., 2014), profit maximization (Brown et al., 2015), factory performance (Asuyama et al., 2017; Brown et al., 2013), the public labor inspectorate system (Dupper et al., 2016), whether compliance pays off in terms of attracting reputation‐conscious buyers (Oka, 2012), and the relationship between wildcat strikes and workplace bipartite committees (Anner, 2017). 5 The research has also drawn on focus group and interview data to examine worker and management perceptions of what explains variation in compliance (Pike & Godfrey 2012, 2014, 2015), what role worker voice plays in this process (Pike, 2020b), and whether BW's recent partnership with Gap Inc. is proving to be effective at strengthening workplace cooperation in both BW and non‐BW factories throughout their supply chain (Pike, 2020a).…”

Why is the business case for social compliance in global value chains unpersuasive? Rethinking costs, prices and profits

“…In order to further control for firm characteristics unrelated to social compliance that may be determining firm performance, we estimate a variant of equation (1) in which NC c i t is defined to be the change in non-compliance between observations at time t -1 and at t, as in Ichniowski, Shaw and Prennushi (1997) and Robertson, Brown and Dehejia (2021). That is, NC c i t is defined as new compliance at time t.…”

“…It is a common belief among stakeholders in global value chains (GVCs) that the business case for humane labour management should induce factory managers at the bottom of GVCs to adopt humane, socially compliant labour management systems. Unfortunately, despite 25 years of research showing that such practices reduce workforce turnover and improve productivity, activities such as wage theft and workplace abuse are still commonplace (Ichniowski, Shaw and Prennushi 1997;Ton 2014;Hamilton, Nickerson and Owan 2003;Lollo and O'Rourke 2020;Robertson, Brown and Dehejia 2021;Levine, Toffel and Johnson 2012;Scheck, Emont and Berzon 2019;Girit 2017;Hodal 2019;Paton 2020a).…”

Deep Integration in Trade Agreements: Labor Clauses, Tariffs, and Trade Flows

“…The results in column (2) of Table 7b suggest that setting up a private committee for monitoring is associated with more trade, but third-party monitoring is associated with less trade. Third-party monitoring (such as the Better Work program described earlier) has been shown to significantly improve compliance with domestic labor law and international labor standards (Beresford 2009, Robertson 2020, Robertson et al 2021). The role of private committees deserves additional study.…”