Investigating the Link Between Types of Garment Value Chains and Working Conditions

There is growing evidence that the type and governance of global value chains (GVCs) has implications for working conditions at the site of production. Suppliers producing for visible and reputation-conscious buyers are found to have better labour conditions than factories in less visible value chains (Lund-Thomsen and Nadvi 2011; Oka 2010). Similarly, GVCs driven by a lead firm give more room for labour agency and thus potential for improving labour conditions than purely market-based chains (Riisgaard andHammer 2011). Moreover, when lead firms engage with suppliers in a collaborative manner, working conditions can substantially improve (Locke 2013).

Despite the progress in this area of research, we still know little about how different types of GVC affect specific areas of working conditions. Does it influence labour conditions across the board or does it have more impact on certain issue areas than others? If so, why? While existing qualitative evidence suggests that buyers tend to help improve safety and health with little impact on working hours and labour rights, a systematic study has been lacking with a focus on different types of GVC. 

This paper seeks to answer the question by drawing on comprehensive factory-level data covering all garment factories in Cambodia from 2006 to 2013. The panel data enable us to examine the evolution of working conditions over time and possible driving factors. The findings are likely to have important implications for regulating labour and social upgrading in GVCs. Notably, the result will shed light on the potential and limits of buyer-driven regulation of labour while providing policy insights for complementing such effort.