Chains of Love? Global Production and the Firm‐Level Diffusion of Labor Standards
Open accessAbstract
Under what conditions does the global economy serve as a means for the diffusion of labor standards and practices? We anticipate variation among internationally engaged firms in their propensity to improve labor standards. Upgrading is most likely when a firm's products exhibit significant cross‐market differences in markups, making accessing high‐standards overseas markets particularly profitable. Additionally, upgrading is more likely when lead firms attach a high salience to labor standards. Therefore, while participation in global production induces “trading up” behaviors among firms overall, the effect strength varies across industries. We test our expectations via a survey experiment, which queries foreign firms operating in Vietnam about their willingness to invest in labor‐related upgrading. We find strong evidence for the effect of markups on upgrading choices and suggestive evidence for the saliency mechanism.
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Issues can emerge on the demand side due to sustainability and ethical breaches in large MNEs' value chains, as evidenced in multiple, recent instances of public backlash in response to poor working conditions in manufacturing factories in South and Southeast Asia.
“Issues can also emerge on the demand side due to sustainability and ethical breaches in large MNEs' value chains, as evidenced in multiple, recent instances of public backlash in response to poor working conditions in manufacturing factories in South and Southeast Asia (Malesky & Mosley, 2018).”
From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Malesky & Mosley, 2018
Labor standards have become one critical frontier of GVC organization.
“For example, labor standards have become one critical frontier of GVC organization (Hastings, 2019;Malesky & Mosley, 2018).”
From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Malesky & Mosley, 2018
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- Authors
- Malesky, E. J., & Mosley, L.
- Affiliations
- Duke University (US)
- University of North Carolina at Chapel Hill (US)
- Venue
- American Journal of Political Science
- Publisher
- Wiley
- Published
- 2018-06-13
- Volume
- 62
- Issue
- 3
- Pages
- 712-728
- ISSN
- 0092-5853 (ISSN-L)
- 1540-5907
- OpenAlex
- W2808273843
- Cited by
- 107
- References
- 62
- Citations by year
- 2026: 6 · 2025: 11 · 2024: 9 · 2023: 30 · 2022: 24 · 2021: 10 · 2020: 9 · 2019: 6 · 2018: 2
- FWCI
- 11.28
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- American Journal of Political Science (publishedVersion)
- Funders
- International Labour Organization
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Global trade, sustainability, and social impact
- Social Sciences › Development › Software Engineering and Design Patterns
- Social Sciences › Business, Management and Accounting › Strategy and Management › International Business and FDI
- Keywords
- labor standards, global production, upgrading, markups, salience, foreign companies, Vietnam, survey experiment
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