IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Spillover Effects of International Standards: Working Conditions in the Vietnamese SMEs

Listed author(s):
  • Trifković, Neda

Private international standards are commonly applied to improve market access and competitiveness. While most studies focus on trade effects and organizational outcomes, very few studies look at the effect of standards on employees. Using a three-year matched employer–employee panel dataset, this paper finds that the application of management standards improves working conditions in small and medium enterprises (SMEs) in Vietnam. Certified firms pay higher wages on average, implying that the adoption of standards could boost labor productivity. They are also more likely to offer formal contracts, illustrating that benefits from standards also have non-monetary aspects. These effects come from higher investment in employee training, adherence to national labor laws, and engagement of non-technical workforce. There is, however, no systematic impact of standards on the provision of fringe benefits, such as paid sick leave and health, social, unemployment, and accident insurance. The estimation accounts for endogenous matching of workers with firms and unobserved heterogeneity using an instrumental variable approach. The study reveals unexpected benefits from certification.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0305750X17301171
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal World Development.

Volume (Year): 97 (2017)
Issue (Month): C ()
Pages: 79-101

as
in new window

Handle: RePEc:eee:wdevel:v:97:y:2017:i:c:p:79-101
DOI: 10.1016/j.worlddev.2017.03.040
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. John McMillan & Christopher Woodruff, 1999. "Interfirm Relationships and Informal Credit in Vietnam," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1285-1320.
  2. Ans Kolk & Rob van Tulder, 2002. "Child Labor and Multinational Conduct: A Comparison of International Business andStakeholder Codes," Journal of Business Ethics, Springer, vol. 36(3), pages 291-301, March.
  3. Eric A. Verhoogen, 2008. "Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 489-530.
  4. Deepananda Herath & Zuhair Hassan & Spencer Henson, 2007. "Adoption of Food Safety and Quality Controls: Do Firm Characteristics Matter? Evidence from the Canadian Food Processing Sector," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 55(3), pages 299-314, 09.
  5. Kaushik Basu, 1999. "Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1083-1119, September.
  6. Fontagné, Lionel & Orefice, Gianluca & Piermartini, Roberta & Rocha, Nadia, 2015. "Product standards and margins of trade: Firm-level evidence," Journal of International Economics, Elsevier, vol. 97(1), pages 29-44.
  7. repec:ner:leuven:urn:hdl:123456789/335950 is not listed on IDEAS
  8. Alberto Abadie & Joshua Angrist & Guido Imbens, 2002. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings," Econometrica, Econometric Society, vol. 70(1), pages 91-117, January.
  9. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 2, pages 13-38 World Scientific Publishing Co. Pte. Ltd..
  10. repec:eee:labchp:v:3:y:1999:i:pb:p:2165-2214 is not listed on IDEAS
  11. Katherine Baicker & Amitabh Chandra, 2006. "The Labor Market Effects of Rising Health Insurance Premiums," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 609-634, July.
  12. Oi, Walter Y. & Idson, Todd L., 1999. "Firm size and wages," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 33, pages 2165-2214 Elsevier.
  13. Beata Smarzynska Javorcik & Mariana Spatareanu, 2005. "Do Foreign Investors Care about Labor Market Regulations?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(3), pages 375-403, October.
  14. Panagiotis Ganotakis & James H. Love, 2011. "R&D, product innovation, and exporting: evidence from UK new technology based firms," Oxford Economic Papers, Oxford University Press, vol. 63(2), pages 279-306, April.
  15. Davies, Ronald B. & Vadlamannati, Krishna Chaitanya, 2013. "A race to the bottom in labor standards? An empirical investigation," Journal of Development Economics, Elsevier, vol. 103(C), pages 1-14.
  16. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
  17. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  18. David I. Levine & Michael W. Toffel, 2010. "Quality Management and Job Quality: How the ISO 9001 Standard for Quality Management Systems Affects Employees and Employers," Management Science, INFORMS, vol. 56(6), pages 978-996, June.
  19. Matthew Potoski & Aseem Prakash, 2009. "Information asymmetries as trade barriers: ISO 9000 increases international commerce," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(2), pages 221-238.
  20. Christian Volpe Martincus & Sebastián Castresana & Tomás Castagnino, 2010. "ISO Standards: A Certificate to Expand Exports? Firm-Level Evidence from Argentina," Review of International Economics, Wiley Blackwell, vol. 18(5), pages 896-912, November.
  21. Hassan Fouayzi & Julie A. Caswell & Neal H. Hooker, 2006. "Motivations of Fresh-Cut Produce Firms to Implement Quality Management Systems," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(1), pages 132-146.
  22. Giovanni L. Violante, 2002. "Technological Acceleration, Skill Transferability, and the Rise in Residual Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 297-338.
  23. Ullah, Barkat & Wei, Zuobao & Xie, Feixue, 2014. "ISO certification, financial constraints, and firm performance in Latin American and Caribbean countries," Global Finance Journal, Elsevier, vol. 25(3), pages 203-228.
  24. John M. Abowd & Francis Kramarz & Sébastien Roux, 2006. "Wages, Mobility and Firm Performance: Advantages and Insights from Using Matched Worker-Firm Data," Economic Journal, Royal Economic Society, vol. 116(512), pages 245-285, 06.
  25. Acemoglu, Daron & Pischke, Jorn-Steffen, 1999. "Beyond Becker: Training in Imperfect Labour Markets," Economic Journal, Royal Economic Society, vol. 109(453), pages 112-142, February.
  26. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 2-16, January.
  27. Drusilla K. Brown, 2001. "Labor Standards: Where Do They Belong on the International Trade Agenda?," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 89-112, Summer.
  28. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2005. "SMEs, Growth, and Poverty: Cross-Country Evidence," Journal of Economic Growth, Springer, vol. 10(3), pages 199-229, 09.
  29. Terlaak, Ann & King, Andrew A., 2006. "The effect of certification with the ISO 9000 Quality Management Standard: A signaling approach," Journal of Economic Behavior & Organization, Elsevier, vol. 60(4), pages 579-602, August.
  30. Spencer Henson & John Humphrey, 2010. "Understanding the Complexities of Private Standards in Global Agri-Food Chains as They Impact Developing Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 46(9), pages 1628-1646.
  31. Susan Helper & David I. Levine & Elliot Bendoly, 2002. "Employee Involvement And Pay At Us And Canadian Auto Suppliers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(2), pages 329-377, 06.
  32. Eric Neumayer & Richard Perkins, 2005. "Uneven geographies of organizational practice: explaining the cross-national transfer and diffusion of ISO 9000," LSE Research Online Documents on Economics 16271, London School of Economics and Political Science, LSE Library.
  33. Solomon Asfaw & Dagmar Mithöfer & Hermann Waibel, 2010. "Agrifood supply chain, private-sector standards, and farmers' health: evidence from Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3-4), pages 251-263, 05.
  34. W. Reed Walker, 2011. "Environmental Regulation and Labor Reallocation: Evidence from the Clean Air Act," American Economic Review, American Economic Association, vol. 101(3), pages 442-447, May.
  35. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
  36. Julie A. Caswell & Mary E. Bredahl & Neal H. Hooker, 1998. "How Quality Management Metasystems Are Affecting the Food Industry," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(2), pages 547-557.
  37. Galli, Rossana & Kucera, David, 2004. "Labor Standards and Informal Employment in Latin America," World Development, Elsevier, vol. 32(5), pages 809-828, May.
  38. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, December.
  39. Jaffee, Steve & Masakure, Oliver, 2005. "Strategic use of private standards to enhance international competitiveness: Vegetable exports from Kenya and elsewhere," Food Policy, Elsevier, vol. 30(3), pages 316-333, June.
  40. Hatanaka, Maki & Bain, Carmen & Busch, Lawrence, 2005. "Third-party certification in the global agrifood system," Food Policy, Elsevier, vol. 30(3), pages 354-369, June.
  41. Charles J. Corbett & María J. Montes-Sancho & David A. Kirsch, 2005. "The Financial Impact of ISO 9000 Certification in the United States: An Empirical Analysis," Management Science, INFORMS, vol. 51(7), pages 1046-1059, July.
  42. Petra Christmann & Glen Taylor, 2006. "Firm self-regulation through international certifiable standards: determinants of symbolic versus substantive implementation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(6), pages 863-878, November.
  43. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
  44. Kenneth R. Troske, 1999. "Evidence On The Employer Size-Wage Premium From Worker-Establishment Matched Data," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 15-26, February.
  45. Bayo-Moriones, Alberto & Merino-Díaz-de-Cerio, Javier & Antonio Escamilla-de-León, Sergio & Mary Selvam, Rejina, 2011. "The impact of ISO 9000 and EFQM on the use of flexible work practices," International Journal of Production Economics, Elsevier, vol. 130(1), pages 33-42, March.
  46. Magruder, Jeremy R., 2013. "Can minimum wages cause a big push? Evidence from Indonesia," Journal of Development Economics, Elsevier, vol. 100(1), pages 48-62.
  47. Henson, Spencer & Reardon, Thomas, 2005. "Private agri-food standards: Implications for food policy and the agri-food system," Food Policy, Elsevier, vol. 30(3), pages 241-253, June.
  48. Henson, Spencer & Masakure, Oliver & Cranfield, John, 2011. "Do Fresh Produce Exporters in Sub-Saharan Africa Benefit from GlobalGAP Certification?," World Development, Elsevier, vol. 39(3), pages 375-386, March.
  49. Barrientos, Stephanie & Dolan, Catherine & Tallontire, Anne, 2003. "A Gendered Value Chain Approach to Codes of Conduct in African Horticulture," World Development, Elsevier, vol. 31(9), pages 1511-1526, September.
  50. Acemoglu, Daron, 2001. "Good Jobs versus Bad Jobs," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 1-21, January.
  51. Liesbeth Colen & Miet Maertens & Johan Swinnen, 2012. "Private Standards, Trade and Poverty: GlobalGAP and Horticultural Employment in Senegal," The World Economy, Wiley Blackwell, vol. 35(8), pages 1073-1088, 08.
  52. Terziovski, Milé & Guerrero, Jose-Luis, 2014. "ISO 9000 quality system certification and its impact on product and process innovation performance," International Journal of Production Economics, Elsevier, vol. 158(C), pages 197-207.
  53. repec:eee:labchp:v:3:y:1999:i:pb:p:2629-2710 is not listed on IDEAS
  54. He, Wenlong & Liu, Chong & Lu, Jiangyong & Cao, Jing, 2015. "Impacts of ISO 14001 adoption on firm performance: Evidence from China," China Economic Review, Elsevier, vol. 32(C), pages 43-56.
  55. Nguyen, Binh T. & Albrecht, James W. & Vroman, Susan B. & Westbrook, M. Daniel, 2007. "A quantile regression decomposition of urban-rural inequality in Vietnam," Journal of Development Economics, Elsevier, vol. 83(2), pages 466-490, July.
  56. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier.
  57. Gao, Qin & Yang, Sui & Li, Shi, 2012. "Labor contracts and social insurance participation among migrant workers in China," China Economic Review, Elsevier, vol. 23(4), pages 1195-1205.
  58. Olney, William W., 2013. "A race to the bottom? Employment protection and foreign direct investment," Journal of International Economics, Elsevier, vol. 91(2), pages 191-203.
  59. Martinez-Costa, Micaela & Martinez-Lorente, Angel R. & Choi, Thomas Y., 2008. "Simultaneous consideration of TQM and ISO 9000 on performance and motivation: An empirical study of Spanish companies," International Journal of Production Economics, Elsevier, vol. 113(1), pages 23-39, May.
  60. Robertson, Raymond & Brown, Drusilla & Dehejia, Rajeev, 2016. "Working Conditions and Factory Survival: Evidence from Better Factories Cambodia," IZA Discussion Papers 10026, Institute for the Study of Labor (IZA).
  61. Manders, Basak & de Vries, Henk J. & Blind, Knut, 2016. "ISO 9001 and product innovation: A literature review and research framework," Technovation, Elsevier, vol. 48, pages 41-55.
  62. Amengual, Matthew, 2010. "Complementary Labor Regulation: The Uncoordinated Combination of State and Private Regulators in the Dominican Republic," World Development, Elsevier, vol. 38(3), pages 405-414, March.
  63. Sartor, Marco & Orzes, Guido & Di Mauro, Carmela & Ebrahimpour, Maling & Nassimbeni, Guido, 2016. "The SA8000 social certification standard: Literature review and theory-based research agenda," International Journal of Production Economics, Elsevier, vol. 175(C), pages 164-181.
  64. Anna Folke Larsen & John Rand & Nina Torm, 2011. "Do Recruitment Ties Affect Wages? An Analysis using Matched Employer–Employee Data from Vietnam," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 541-555, 08.
  65. Oliver Masakure & Spencer Henson & John Cranfield, 2009. "Standards and export performance in developing countries: Evidence from Pakistan," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(3), pages 395-419.
  66. Lipsey, Robert E. & Sjoholm, Fredrik, 2004. "Foreign direct investment, education and wages in Indonesian manufacturing," Journal of Development Economics, Elsevier, vol. 73(1), pages 415-422, February.
  67. repec:ilo:ilowps:470695 is not listed on IDEAS
  68. Henrik Hansen & John Rand & Finn Tarp, 2009. "Enterprise Growth and Survival in Vietnam: Does Government Support Matter?," Journal of Development Studies, Taylor & Francis Journals, vol. 45(7), pages 1048-1069, August.
  69. Ehlert, Christoph R. & Mithöfer, Dagmar & Waibel, Hermann, 2014. "Worker welfare on Kenyan export vegetable farms," Food Policy, Elsevier, vol. 46(C), pages 66-73.
  70. Goedhuys, Micheline & Sleuwaegen, Leo, 2013. "The Impact of International Standards Certification on the Performance of Firms in Less Developed Countries," World Development, Elsevier, vol. 47(C), pages 87-101.
  71. Rossi, Arianna, 2013. "Does Economic Upgrading Lead to Social Upgrading in Global Production Networks? Evidence from Morocco," World Development, Elsevier, vol. 46(C), pages 223-233.
  72. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 27-28, January.
  73. John Rand & Finn Tarp, 2011. "Does Gender Influence the Provision of Fringe Benefits? Evidence From Vietnamese SMEs," Feminist Economics, Taylor & Francis Journals, vol. 17(1), pages 59-87, January.
  74. Schuster, Monica & Maertens, Miet, 2015. "The Impact of Private Food Standards on Developing Countries’ Export Performance: An Analysis of Asparagus Firms in Peru," World Development, Elsevier, vol. 66(C), pages 208-221.
  75. Boockmann, Bernhard, 2010. "The Effect of ILO Minimum Age Conventions on Child Labor and School Attendance: Evidence From Aggregate and Individual-Level Data," World Development, Elsevier, vol. 38(5), pages 679-692, May.
  76. Ann Harrison & Jason Scorse, 2010. "Multinationals and Anti-sweatshop Activism," American Economic Review, American Economic Association, vol. 100(1), pages 247-273, March.
  77. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:97:y:2017:i:c:p:79-101. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.