Spillover Effects of International Standards: Working Conditions in the Vietnamese SMEs

TY - JOUR

T1 - Spillover Effects of International Standards

T2 - Working Conditions in the Vietnamese SMEs

AU - Trifković, Neda

PY - 2017/9/1

Y1 - 2017/9/1

N2 - Private international standards are commonly applied to improve market access and competitiveness. While most studies focus on trade effects and organizational outcomes, very few studies look at the effect of standards on employees. Using a three-year matched employer–employee panel dataset, this paper finds that the application of management standards improves working conditions in small and medium enterprises (SMEs) in Vietnam. Certified firms pay higher wages on average, implying that the adoption of standards could boost labor productivity. They are also more likely to offer formal contracts, illustrating that benefits from standards also have non-monetary aspects. These effects come from higher investment in employee training, adherence to national labor laws, and engagement of non-technical workforce. There is, however, no systematic impact of standards on the provision of fringe benefits, such as paid sick leave and health, social, unemployment, and accident insurance. The estimation accounts for endogenous matching of workers with firms and unobserved heterogeneity using an instrumental variable approach. The study reveals unexpected benefits from certification.

AB - Private international standards are commonly applied to improve market access and competitiveness. While most studies focus on trade effects and organizational outcomes, very few studies look at the effect of standards on employees. Using a three-year matched employer–employee panel dataset, this paper finds that the application of management standards improves working conditions in small and medium enterprises (SMEs) in Vietnam. Certified firms pay higher wages on average, implying that the adoption of standards could boost labor productivity. They are also more likely to offer formal contracts, illustrating that benefits from standards also have non-monetary aspects. These effects come from higher investment in employee training, adherence to national labor laws, and engagement of non-technical workforce. There is, however, no systematic impact of standards on the provision of fringe benefits, such as paid sick leave and health, social, unemployment, and accident insurance. The estimation accounts for endogenous matching of workers with firms and unobserved heterogeneity using an instrumental variable approach. The study reveals unexpected benefits from certification.

KW - certification

KW - SMEs

KW - standards

KW - Vietnam

KW - working conditions

UR - http://www.scopus.com/inward/record.url?scp=85018279917&partnerID=8YFLogxK

U2 - 10.1016/j.worlddev.2017.03.040

DO - 10.1016/j.worlddev.2017.03.040

M3 - Journal article

AN - SCOPUS:85018279917

SN - 0305-750X

VL - 97

SP - 79

EP - 101

JO - World Development

JF - World Development

ER -