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Codes in Context: How States, Markets, and Civil Society Shape Adherence to Global Labor Standards

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Author Info

  • Michael W. Toffel

    ()
    (Harvard Business School, Technology and Operations Management Unit)

  • Jodi L. Short

    ()
    (University of California, Hastings College of the Law)

  • Melissa Ouellet

    ()
    (Harvard Business School)

Abstract

Transnational business regulation is increasingly implemented through private voluntary programs-like certification regimes and codes of conduct-that diffuse global standards. But little is known about the conditions under which companies adhere to these standards. We conduct one of the first large-scale comparative studies to determine which international, domestic, civil society, and market institutions promote supply chain factories' adherence to the global labor standards embodied in codes of conduct imposed by multinational buyers. We find that suppliers are more likely to adhere when they are embedded in states that participate actively in the ILO treaty regime and that have stringent domestic labor law and high levels of press freedom. We further demonstrate that suppliers perform better when they serve buyers located in countries where consumers are wealthy and socially conscious. Taken together, these findings suggest the importance of overlapping state, civil society, and market governance regimes to meaningful transnational regulation.

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File URL: http://www.hbs.edu/faculty/pages/download.aspx?name=13-045.pdf
File Function: Revised version, 2014
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Bibliographic Info

Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 13-045.

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Length: 37 pages
Date of creation: Nov 2012
Date of revision: Sep 2014
Handle: RePEc:hbs:wpaper:13-045

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Related research

Keywords: Transnational regulation; Labor standards; Consumer politics; Codes of conduct; Compliance;

This paper has been announced in the following NEP Reports:

References

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  1. David P. Baron, 2003. "Private Politics," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 12(1), pages 31-66, 03.
  2. Dyck, Alexander & Zingales, Luigi, 2002. "The Corporate Governance Role of the Media," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3630, C.E.P.R. Discussion Papers.
  3. Richard M. Locke & Fei Qin & Alberto Brause, 2007. "Does Monitoring Improve Labor Standards? Lessons from Nike," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 61(1), pages 3-31, October.
  4. Chonnikarn Fern Jira & Michael W. Toffel, 2011. "Engaging Supply Chains in Climate Change," Harvard Business School Working Papers, Harvard Business School 12-026, Harvard Business School, revised Oct 2012.
  5. Michael W. Toffel, 2008. "Coerced Confessions: Self-Policing in the Shadow of the Regulator," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 24(1), pages 45-71, May.
  6. Bartley Tim, 2010. "Transnational Private Regulation in Practice: The Limits of Forest and Labor Standards Certification in Indonesia," Business and Politics, De Gruyter, De Gruyter, vol. 12(3), pages 1-36, October.
  7. Michael J. Lenox & Charles E. Eesley, 2009. "Private Environmental Activism and the Selection and Response of Firm Targets," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 18(1), pages 45-73, 03.
  8. Colin Scott, 2010. "Regulatory Governance and the Challenge of Constitutionalism," EUI-RSCAS Working Papers, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS) 7, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
  9. Erin Marie Reid & Michael W. Toffel, 2008. "Responding to Public and Private Politics: Corporate Disclosure of Climate Change Strategies," Harvard Business School Working Papers, Harvard Business School 09-019, Harvard Business School, revised Jun 2009.
  10. Michael W. Toffel & Jodi L. Short, 2011. "Coming Clean and Cleaning Up: Does Voluntary Self-Reporting Indicate Effective Self-Policing?," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 54(3), pages 609 - 649.
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