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The effects of the Rana Plaza collapse on the sourcing choices of French importers

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  • Pamina Koenig

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

  • Sandra Poncet

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

This paper analyzes the effects of a major reputational shock affecting textile importers from Bangladesh. The collapse of the Rana Plaza building in April 2013 generated a surge of activism and media coverage specifically targeting the firms that sourced from the factories affected by the disaster. Using monthly firm-level import data from French Customs, we study any potential disruption in these firms' imports from all origins, and specifically from Bangladesh. We use a difference-in-differences approach. French textile imports from Bangladesh rose continuously after the shock, and the overall imports of retailers sourcing from the Rana Plaza show no drop after the event. Our results do reveal a relative decline in Bangladeshi imports for those retailers named for sourcing from the collapsed factories. This effect is mirrored by a relative increase in these exposed firms' imports from four particular countries, which are non-Asian and are geographically closer to France.

Suggested Citation

  • Pamina Koenig & Sandra Poncet, 2022. "The effects of the Rana Plaza collapse on the sourcing choices of French importers," PSE-Ecole d'économie de Paris (Postprint) halshs-03672209, HAL.
    • Handle: RePEc:hal:pseptp:halshs-03672209
    DOI: 10.1016/j.jinteco.2022.103576
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03672209
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    Cited by:

    1. Grier, Kevin & Mahmood, Towhid & Powell, Benjamin, 2023. "Anti-sweatshop activism and the safety-employment tradeoff: Evidence from Bangladesh's Rana Plaza disaster," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 174-190.
    2. Juan de Lucio & Raúl Mínguez & Asier Minondo & Francisco Requena, 2024. "Reducing trade with Russia: Sanctions vs. reputation," Working Papers 2406, Department of Applied Economics II, Universidad de Valencia.
    3. Elisa Navarra, 2022. "Stock Market Response to Firms’ Misconduct," Working Papers ECARES 2022-40, ULB -- Universite Libre de Bruxelles.

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    More about this item

    Keywords

    Reputation; Shocks; Multinational firms; Activism; Trade; Imports;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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