Globalization, Wages, and Working Conditions: A Case Study of Cambodian Garment Factories - Working Paper 257

Arianna Rossi

No 257, Working Papers from Center for Global Development

Abstract: We use a comprehensive data set of working conditions and wage compliance in Cambodia’s exporting garment factories to explore (1) the impact of foreign ownership on wages and working conditions, (2) whether the relationship between wages and working conditions within these exporting factories more closely resembles efficiency wage or compensating differential theory, and (3) whether the wage-working conditions relationship differs between domestically owned and foreign-owned firms. We find that foreign ownership increases compliance on both wages and working conditions, contradicting the contention that higher wages in foreign-owned firms compensate workers for worse working conditions. In addition, we find a robust positive relationship between wages and working conditions in the sample as a whole, suggesting that efficiency wages or a similar theory more accurately explains the behavior of these exporting firms than compensating differentials.

Keywords: better factories cambodia; compensating differentials; cambodia; apparel (search for similar items in EconPapers)
JEL-codes: O14 O15 O19 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2011-06
References: Add references at CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:cgd:wpaper:257

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