Codes in context: How states, markets, and civil society shape adherence to global labor standards

Abstract

Transnational business regulation is increasingly implemented through private voluntary programs-like certification regimes and codes of conduct-that diffuse global standards. But little is known about the conditions under which companies adhere to these standards. We conduct one of the first large-scale comparative studies to determine which international, domestic, civil society, and market institutions promote supply chain factories' adherence to the global labor standards embodied in codes of conduct imposed by multinational buyers. We find that suppliers are more likely to adhere when they are embedded in states that participate actively in the ILO treaty regime and that have stringent domestic labor law and high levels of press freedom. We further demonstrate that suppliers perform better when they serve buyers located in countries where consumers are wealthy and socially conscious. Taken together, these findings suggest the importance of overlapping state, civil society, and market governance regimes to meaningful transnational regulation.

Organizational Structures and the Improvement of Working Conditions in Global Supply Chains: Legalization, Participation, and Economic Incentives

“…Research on supply chain labor standards suggests that it is untenable to dismiss the organizational structures adopted in these environments wholesale as myth and ceremony. Studies consistently have shown that, on average, suppliers that adopt various types of legalization and participation structures do, in fact, improve their working conditions over time (Ang et al 2012, Locke et al 2007, 2013, Nadvi et al 2011, Shea et al 2010, Toffel et al 2015. These findings belie a straightforward story of symbolic or cynical adoption.…”

“…For instance, research has identified regulatory attention and enforcement as important factors that can reduce the decoupling of organizational commitment and practice (Dobbin and Kelly 2007, Marquis and Qian 2014, Short and Toffel 2010. Studies of private organizations' implementation of human rights or corporate social responsibility (CSR) policies have suggested that institutional pressures emanating from activists or the press can likewise increase companies' commitments to better practices (Fransen 2012, Lim and Tsutsui 2012, Marquis et al 2016, Seidman 2007, Toffel et al 2015.…”

“…We measure press freedom as the Press Freedom Index from Reporters without Borders, which we reverse-code so that higher values indicate greater press freedom and rescale to range from 0 to 1. Lastly, we control for a supplier country's dependence on foreign direct investment (FDI) because it might influence the international pressure on suppliers to improve their practices and meet international labor standards (Toffel et al 2015). Using World Bank data, we operationalize this by calculating the percentage of FDI in each supplier country's gross domestic product in the year of the prior audit, FDI inflow, and logging the result to reduce skew.…”

Drivers and barriers to reshoring: a literature review on offshoring in reverse

“…Third, theft of intellectual property and patent enforcement is a result of weak patent enforcement in developing country. If we draw from research in business ethics it is established that non-compliance with agreements is especially troublesome in countries with poor public regulatory systems (Locke et al, 2013;Toffel et al, 2014). Fourth, high employee turnover continues to be a problem in several offshore locations.…”

Do Labour Rights Matter for Export? A Qualitative Comparative Analysis of Pineapple Trade to the EU

“…Moreover, developed countries could serve as role models for developing countries through market integration, which can result in the harmonisation of institutions and regulatory arrangements (Kucera & Sarna, 2006;Neumayer & de Soysa, 2006). At firm level, Toffel, Short and Ouellet (2015) found better labour rights compliance among suppliers serving buyers located in countries where consumers are wealthy and socially conscious. In addition, Distelhorst and Locke (2017) concluded that importers favour doing business with companies that comply with basic labour and environmental standards.…”