Discussion Paper 29: Lights On: Transparency and Compliance – Evidence from Cambodia

The author of this paper uses repeated factory-level compliance data from the Better Factories Cambodia program to evaluate the change in compliance with labor law and international standards after a return to public disclosure.  Using a difference-in-difference approach that is often applied to control for endogeneity, the author finds that compliance improved following the implementation of transparency.  The change does not appear to be correlated with higher compliance in the least-compliant firms, but does appear to be correlated with higher compliance in a group of 21 critical compliance areas that represent fundamental worker rights.

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