Discussion Paper 19: Survival of the Fittest – And Most Compliant

22 Sep 2015

Evidence On The Relationship Between Firm Survival And Social Protection Compliance

In an era of globalized competitive pressure, most employers in developing countries do not provide social protection benefits to their employees. This study tests the presumed argument that such provisions threaten firm survival by increasing labour costs. Using a discrete-time survival analysis model of 595 Cambodian garment factories, this study finds that increased compliance to social protection labour standards (social protection compliance) is associated with a reduced odds of factory closure. This result implies that increased social protection compliance can enhance the well-being of workers while maintaining a firm’s competitiveness.


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