IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v96y2017icp562-577.html
   My bibliography  Save this article

Do Economic Problems at Home Undermine Worker Safety Abroad?: A Panel Study, 1980–2009

Author

Listed:
  • Lim, Sijeong
  • Prakash, Aseem

Abstract

Do economic downturns in the Global North undermine worker safety in the Global South? Literature suggests that bilateral trade linkages lead to the diffusion of “good” labor standards from importing countries of the Global North to exporting countries of the Global South. The crucial mechanism is the ability and willingness of importing firms to deploy their market leverage and ask for improved labor standards from their overseas suppliers. Yet, cost-cutting pressures emanating from economic downturns might lead the same importing firms to give lower priority to worker safety in their overseas supply chains. When importing firms demand price reductions, overseas suppliers might respond by reducing wages, ignoring safety regulations, and working their labor force for longer hours. The observable implication is that worker safety in the Global South may deteriorate during economic downturns in their export markets located in the Global North. We evaluate our hypothesis using a panel of 83 developing countries for the period during 1980–2009, and find that economic downturns in developed country markets are associated with significant increases in non-fatal occupational injury rates in developing countries. The injury-increasing effect is more pronounced in developing countries with weak workers' rights protection.

Suggested Citation

  • Lim, Sijeong & Prakash, Aseem, 2017. "Do Economic Problems at Home Undermine Worker Safety Abroad?: A Panel Study, 1980–2009," World Development, Elsevier, vol. 96(C), pages 562-577.
  • Handle: RePEc:eee:wdevel:v:96:y:2017:i:c:p:562-577
    DOI: 10.1016/j.worlddev.2017.03.038
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X17301080
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.worlddev.2017.03.038?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jeffery Bray & Nick Johns & David Kilburn, 2011. "An Exploratory Study into the Factors Impeding Ethical Consumption," Journal of Business Ethics, Springer, vol. 98(4), pages 597-608, February.
    2. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. Greenhill, Brian & Mosley, Layna & Prakash, Aseem, 2009. "Trade-based Diffusion of Labor Rights: A Panel Study, 1986–2002," American Political Science Review, Cambridge University Press, vol. 103(4), pages 669-690, November.
    4. Abagail McWilliams & Donald S. Siegel & Patrick M. Wright, 2006. "Corporate Social Responsibility: Strategic Implications," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 1-18, January.
    5. Alex Hughes, 2012. "Corporate ethical trading in an economic downturn: recessionary pressures and refracted responsibilities," Journal of Economic Geography, Oxford University Press, vol. 12(1), pages 33-54, January.
    6. Stephen Frost & Margaret Burnett, 2007. "Case study: the Apple iPod in China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 14(2), pages 103-113, May.
    7. Magdalena Öberseder & Bodo Schlegelmilch & Verena Gruber, 2011. "“Why Don’t Consumers Care About CSR?”: A Qualitative Study Exploring the Role of CSR in Consumption Decisions," Journal of Business Ethics, Springer, vol. 104(4), pages 449-460, December.
    8. Boone, Jan & van Ours, Jan C. & Wuellrich, Jean-Philippe & Zweimüller, Josef, 2011. "Recessions are bad for workplace safety," Journal of Health Economics, Elsevier, vol. 30(4), pages 764-773, July.
    9. Gereffi, Gary & Frederick, Stacey, 2010. "The global apparel value chain, trade and the crisis : challenges and opportunities for developing countries," Policy Research Working Paper Series 5281, The World Bank.
    10. Baldwin, Richard, 2012. "Global supply chains: Why they emerged, why they matter, and where they are going," CEPR Discussion Papers 9103, C.E.P.R. Discussion Papers.
    11. Stephanie Ware Barrientos, 2013. "'Labour Chains': Analysing the Role of Labour Contractors in Global Production Networks," Journal of Development Studies, Taylor & Francis Journals, vol. 49(8), pages 1058-1071, August.
    12. Kimberly Ann Elliott & Richard B. Freeman, 2003. "Can Labor Standards Improve under Globalization?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 338, January.
    13. Adolph, Christopher & Quince, Vanessa & Prakash, Aseem, 2017. "The Shanghai Effect: Do Exports to China Affect Labor Practices in Africa?," World Development, Elsevier, vol. 89(C), pages 1-18.
    14. Jeffrey A. Frankel & Andrew K. Rose, 2005. "Is Trade Good or Bad for the Environment? Sorting Out the Causality," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 85-91, February.
    15. Neumayer, Eric & de Soysa, Indra, 2011. "Globalization and the Empowerment of Women: An Analysis of Spatial Dependence via Trade and Foreign Direct Investment," World Development, Elsevier, vol. 39(7), pages 1065-1075, July.
    16. Rudra, Nita, 2002. "Globalization and the Decline of the Welfare State in Less-Developed Countries," International Organization, Cambridge University Press, vol. 56(2), pages 411-445, April.
    17. Susan Hart, 2010. "Self-regulation, Corporate Social Responsibility, and the Business Case: Do they Work in Achieving Workplace Equality and Safety?," Journal of Business Ethics, Springer, vol. 92(4), pages 585-600, April.
    18. Matthew C. Mahutga, 2014. "Global models of networked organization, the positional power of nations and economic development," Review of International Political Economy, Taylor & Francis Journals, vol. 21(1), pages 157-194, February.
    19. Lim, Sijeong & Mosley, Layna & Prakash, Aseem, 2015. "Revenue Substitution? How Foreign Aid Inflows Moderate the Effect of Bilateral Trade Pressures on Labor Rights," World Development, Elsevier, vol. 67(C), pages 295-309.
    20. Xiaomin Yu, 2009. "From Passive Beneficiary to Active Stakeholder: Workers’ Participation in CSR Movement Against Labor Abuses," Journal of Business Ethics, Springer, vol. 87(1), pages 233-249, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John S. Ahlquist & Layna Mosley, 2021. "Firm participation in voluntary regulatory initiatives: The Accord, Alliance, and US garment importers from Bangladesh," The Review of International Organizations, Springer, vol. 16(2), pages 317-343, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John S. Ahlquist & Layna Mosley, 2021. "Firm participation in voluntary regulatory initiatives: The Accord, Alliance, and US garment importers from Bangladesh," The Review of International Organizations, Springer, vol. 16(2), pages 317-343, April.
    2. Messerschmidt, Luca & Janz, Nicole, 2023. "Unravelling the ‘race to the bottom’ argument: Foreign direct investment and different types of labour rights," World Development, Elsevier, vol. 161(C).
    3. Luca Messerschmidt & Nicole Janz, 2020. "Unravelling the 'race to the bottom' argument: How does FDI affect different types of labour rights?," Munich Papers in Political Economy 05, Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich.
    4. Berliner, Daniel & Greenleaf, Anne & Lake, Milli & Noveck, Jennifer, 2015. "Building Capacity, Building Rights? State Capacity and Labor Rights in Developing Countries," World Development, Elsevier, vol. 72(C), pages 127-139.
    5. Yossi Dahan & Hanna Lerner & Faina Milman-Sivan, 2023. "Shared Responsibility and Labor Rights in Global Supply Chains," Journal of Business Ethics, Springer, vol. 182(4), pages 1025-1040, February.
    6. Canton, César G., 2012. "Empowering People in the Business Frontline: The Ruggie’s Framework and the Capability Approach," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 23(2), pages 191-216.
    7. Plank, Leonhard & Rossi, Arianna & Staritz, Cornelia, 2012. "Workers and social upgrading in "fast fashion": The case of the apparel industry in Morocco and Romania," Working Papers 33, Austrian Foundation for Development Research (ÖFSE).
    8. Dutta, Sourish, 2017. "Mechanics of Global Value chains: India’s Perspective," EconStor Preprints 235156, ZBW - Leibniz Information Centre for Economics.
    9. Magdalena Öberseder & Bodo Schlegelmilch & Verena Gruber, 2011. "“Why Don’t Consumers Care About CSR?”: A Qualitative Study Exploring the Role of CSR in Consumption Decisions," Journal of Business Ethics, Springer, vol. 104(4), pages 449-460, December.
    10. Spodarczyk Edyta, 2019. "An attempt to determine the determinants of an effective impact of corporate social responsibility on consumer behaviour. A pilot study report," Management, Sciendo, vol. 23(2), pages 64-79, December.
    11. Kutaula, Smirti & Gillani, Alvina & Leonidou, Leonidas C. & Christodoulides, Paul, 2022. "Integrating fair trade with circular economy: Personality traits, consumer engagement, and ethically-minded behavior," Journal of Business Research, Elsevier, vol. 144(C), pages 1087-1102.
    12. Jonas Gamso, 2018. "Trade-based adoption of voluntary environmental programs in the developing world: Racing to the top or stuck in the mud?," Policy Sciences, Springer;Society of Policy Sciences, vol. 51(4), pages 515-543, December.
    13. Maria Savona, 2021. "Revisiting High Development Theory to Explain Upgrading Prospects in Business Services Global Value Chains," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(2), pages 206-226, April.
    14. Isaksson, Ann-Sofie & Kotsadam, Andreas, 2018. "Racing to the bottom? Chinese development projects and trade union involvement in Africa," World Development, Elsevier, vol. 106(C), pages 284-298.
    15. Damian Raess & Andreas Dür & Dora Sari, 2018. "Protecting labor rights in preferential trade agreements: The role of trade unions, left governments, and skilled labor," The Review of International Organizations, Springer, vol. 13(2), pages 143-162, June.
    16. Khaled Mohammed Alqahtani & Pingping Song, 2016. "Corporate Social Responsibility of Chinese SMEs: Implementation and Challenges (Spoleczna odpowiedzialnosc chinskich MSP: wdrozenie, realizacja i wyzwania)," Research Reports, University of Warsaw, Faculty of Management, vol. 1(20), pages 65-79.
    17. Céline Louche & Lotte Staelens & Marijke D’Haese, 2020. "When Workplace Unionism in Global Value Chains Does Not Function Well: Exploring the Impediments," Journal of Business Ethics, Springer, vol. 162(2), pages 379-398, March.
    18. Céline Carrère & Marcelo Olarreaga & Damian Raess, 2022. "Labor clauses in trade agreements: Hidden protectionism?," The Review of International Organizations, Springer, vol. 17(3), pages 453-483, July.
    19. Patsy Perry & Steve Wood & John Fernie, 2015. "Corporate Social Responsibility in Garment Sourcing Networks: Factory Management Perspectives on Ethical Trade in Sri Lanka," Journal of Business Ethics, Springer, vol. 130(3), pages 737-752, September.
    20. Raess, Damian & Wagner, Patrick, 2022. "South to north investment linkages and decent work in Brazil," Papers 1382, World Trade Institute.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:96:y:2017:i:c:p:562-577. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.