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Working conditions and factory survival: Evidence from better factories Cambodia

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  • Raymond Robertson
  • Drusilla Brown
  • Rajeev Dehejia

Abstract

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 to the risk of closure, making survival more difficult by imposing external constraints that may interfere with optimizing behavior. Using a relatively new plant‐level panel data set 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.

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  • Raymond Robertson & Drusilla Brown & Rajeev Dehejia, 2021. "Working conditions and factory survival: Evidence from better factories Cambodia," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 228-254, February.
    • Handle: RePEc:bla:rdevec:v:25:y:2021:i:1:p:228-254
    DOI: 10.1111/rode.12719
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    More about this item

    JEL classification:

    • J8 - Labor and Demographic Economics - - Labor Standards
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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