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Globalization, Wages, and Working Conditions: A Case Study of Cambodian Garment Factories - Working Paper 257

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  • Arianna Rossi and Raymond Robertson

Abstract

We use a comprehensive data set of working conditions and wage compliance in Cambodia’s exporting garment factories to explore (1) the impact of foreign ownership on wages and working conditions, (2) whether the relationship between wages and working conditions within these exporting factories more closely resembles efficiency wage or compensating differential theory, and (3) whether the wage-working conditions relationship differs between domestically owned and foreign-owned firms. We find that foreign ownership increases compliance on both wages and working conditions, contradicting the contention that higher wages in foreign-owned firms compensate workers for worse working conditions. In addition, we find a robust positive relationship between wages and working conditions in the sample as a whole, suggesting that efficiency wages or a similar theory more accurately explains the behavior of these exporting firms than compensating differentials.

Suggested Citation

  • Arianna Rossi and Raymond Robertson, 2011. "Globalization, Wages, and Working Conditions: A Case Study of Cambodian Garment Factories - Working Paper 257," Working Papers 257, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:257
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    File URL: http://www.cgdev.org/content/publications/detail/1425198
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    Cited by:

    1. Zhihong Chen & Jabbar Ul-Haq & Hubert Visas & Ahmed Raza Cheema, 2019. "Globalization and Working Environment Nexus: Evidence From Pakistan," SAGE Open, , vol. 9(2), pages 21582440198, May.
    2. World Bank, 2013. "Minimum Wage Policy : Lessons with a Focus on the ASEAN Region," World Bank Publications - Reports 16687, The World Bank Group.
    3. Thomas Bernhardt, 2013. "Developing countries in the global apparel value chain: a tale of upgrading and downgrading experiences," Global Development Institute Working Paper Series ctg-2013-22, GDI, The University of Manchester.
    4. Takaaki Kizu & Stefan Kühn & Christian Viegelahn, 2016. "Jobs in global supply chains: a macroeconomic assessment," FIW Working Paper series 170, FIW.

    More about this item

    Keywords

    better factories cambodia; compensating differentials; cambodia; apparel;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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