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Working Conditions and Factory Survival: Evidence from Better Factories Cambodia

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  • Robertson, Raymond

    (Texas A&M University)

  • Brown, Drusilla

    (Tufts University)

  • Dehejia, Rajeev

    (New York University)

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 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.

Suggested Citation

  • Robertson, Raymond & Brown, Drusilla & Dehejia, Rajeev, 2016. "Working Conditions and Factory Survival: Evidence from Better Factories Cambodia," IZA Discussion Papers 10026, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10026
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    Cited by:

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    2. Trifković, Neda, 2017. "Spillover Effects of International Standards: Working Conditions in the Vietnamese SMEs," World Development, Elsevier, vol. 97(C), pages 79-101.

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    More about this item

    Keywords

    working conditions; apparel; sweatshops; plant survival; closure;
    All these keywords.

    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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