Distelhorst and Locke (2018)

Distelhorst, Greg, and Richard M. Locke. “Does Compliance Pay? Social Standards and Firm-level Trade.” Working paper (MIT), 2018.

From the authors’ abstract: “This study uses new data on retailers and manufacturers to analyze how firm-level trade responds to information about social standards. Contrary to the ‘race to the bottom’ hypothesis, it finds that retail importers reward exporters for complying with labor standards. In difference- in-differences estimates from over two thousand manufacturing establishments in 36 countries, achieving compliance is associated with a 4% [1%, 7%] average increase in annual purchasing. The effect is driven largely by the apparel industry—a longterm target of anti-sweatshop social movements—suggesting that activist campaigns can shape patterns of global trade.”

Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2885455