Firm Compliance and Public Disclosure in Vietnam
Global consumers, international brands, and governments in producing and outsourcing countries aim to improve working conditions in global value chains, but uncertainty exists about what is the best approach. This research uses firm-level data from...
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| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/293561569504345143/Firm-Compliance-and-Public-Disclosure-in-Vietnam http://hdl.handle.net/10986/32485 |
| Summary: | Global consumers, international brands,
and governments in producing and outsourcing countries aim
to improve working conditions in global value chains, but
uncertainty exists about what is the best approach. This
research uses firm-level data from the International Labour
Organization–International Finance Corporation Better Work
Vietnam program to assess the relationship between
transparency on working conditions and firm compliance in
the apparel sector in Vietnam between 2010 and 2018. It
exploits a change in the policies of Better Work Vietnam
when, in 2015, the program announced the launch of a new
public disclosure program that would see factories'
names made publicly available along with their compliance
(or lack thereof) with certain "critical issues."
The paper first examines which firm characteristics
correlate with reductions in noncompliance rates over time,
and then examines the impact of the public disclosure policy
on compliance rates and firm dropout using different
empirical techniques. It finds that while continued
participation in the Better Work Vietnam program has the
strongest effect on changes in firm compliance with labor
standards over time, public disclosure is also associated
with increased compliance, with stronger effects in some
compliance points, including occupational health and safety,
work time, and child labor. There is some evidence of
increased dropout, but no evidence of firms only making
progress on the critical issues is found. The research
findings suggest that public disclosure within global value
chains matters for firm behavior. |
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