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Working conditions and factory survival: Evidence from better factories Cambodia
Author(s) -
Robertson Raymond,
Brown Drusilla,
Dehejia Rajeev
Publication year - 2021
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12719
Subject(s) - closure (psychology) , factory (object oriented programming) , set (abstract data type) , economics , sweatshop , compensation (psychology) , econometrics , psychology , computer science , programming language , psychoanalysis , market economy
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 to the risk of closure, making survival more difficult by imposing external constraints that may interfere with optimizing behavior. Using a relatively new plant‐level panel data set 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.