### Global Economy & Labor Standards Diffusion
How does international trade influence labor standards? The global economy can spread labor practices when firms engage internationally. This study focuses on Vietnam and examines how multinational corporations affect local businesses.
### Cross-Market Markup Differences Matter
Firms are more likely to upgrade labor conditions if their products have significant markup variations across markets. These differences make overseas investments profitable, creating a strong incentive for improvement.
### Lead Firm Salience Influences Standards
When lead firms prioritize high labor standards (salience), they drive better practices throughout the industry chain.
### Survey Experiment in Vietnam Confirms
Our research tested these ideas directly by querying foreign companies operating in Vietnam. Results show clear evidence that cross-market markup differences significantly impact upgrading decisions, while salience appears to be a secondary but still influential factor.
| Chains of Love? Global Production and the Firm-Level Diffusion of Labor Standards was authored by Edmund Malesky and Layna Mosely. It was published by Wiley in AJPS in 2018. |
