[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/hal/pseptp/halshs-02301100.html
   My bibliography  Save this paper

Social responsibility scandals and trade

Author

Listed:
  • Pamina Koenig

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

  • Sandra Poncet

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

Abstract
This paper studies the effect of social responsibility scandals on the imports of consumer products, by focusing on an event which generated massive consumer mobilization against neglecting firms, namely the collapse of the Rana Plaza building affecting the textile industry in Bangladesh. We investigate the import repercussions of this major shock in the perceived quality of clothing producers sourcing in Bangladesh. In line with the well-documented home bias in trade and home-country media slant, we assume that consumers' reaction will be stronger when domestic firms are named and shamed. Our empirical strategy uses a difference-in-difference approach that compares imports from Bangladesh of countries according to whether some of their companies were directly associated with the collapse of the Rana Plaza. Our results are consistent with demand being sensitive to social responsibility scandals. While aggregate imports from Bangladesh continue to increase during the whole period (2010–2016), there is a marked disruption that affects countries whose brands were named and shamed by activists and the media after the disaster. In addition, the decline in imports is all the greater as the number of NGO campaigns on the misbehavior of national textile retailers is high.

Suggested Citation

  • Pamina Koenig & Sandra Poncet, 2019. "Social responsibility scandals and trade," PSE-Ecole d'économie de Paris (Postprint) halshs-02301100, HAL.
    • Handle: RePEc:hal:pseptp:halshs-02301100
    DOI: 10.1016/j.worlddev.2019.104640
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02301100
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-02301100/document
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.worlddev.2019.104640?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    2. Sophie Hatte & Pamina Koenig, 2020. "The Geography of NGO Activism against Multinational Corporations," World Bank Economic Review, World Bank Group, vol. 34(1), pages 143-163.
    3. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(2), pages 284-314, June.
    4. Matthieu Crozet & Julian Hinz, 2020. "Friendly fire: the trade impact of the Russia sanctions and counter-sanctions," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 35(101), pages 97-146.
    5. Hong Canhui & Hu Wei-Min & Prieger James E. & Zhu Dongming, 2011. "French Automobiles and the Chinese Boycotts of 2008: Politics Really Does Affect Commerce," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-38, May.
    6. Ashenfelter, Orley & Ciccarella, Stephen & Shatz, Howard J., 2007. "French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?," Journal of Wine Economics, Cambridge University Press, vol. 2(1), pages 55-74, April.
    7. Ann Harrison & Jason Scorse, 2022. "Multinationals and Anti-Sweatshop Activism," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 13, pages 291-317, World Scientific Publishing Co. Pte. Ltd..
    8. Zhong, Jiatong, 2022. "Reputation of Quality in International Trade: Evidence from Consumer Product Recalls," Working Papers 2022-8, University of Alberta, Department of Economics.
    9. Matthieu Crozet & Julian Hinz, 0. "Friendly fire: the trade impact of the Russia sanctions and counter-sanctions," Economic Policy, CEPR;CES;MSH, vol. 35(101), pages 97-146.
    10. Russell Hillberry & David Hummels, 2003. "Intranational Home Bias: Some Explanations," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1089-1092, November.
    11. Binder, Seth & Neumayer, Eric, 2005. "Environmental pressure group strength and air pollution: An empirical analysis," Ecological Economics, Elsevier, vol. 55(4), pages 527-538, December.
    12. Sophie Hatte & Pamina Koenig, 2020. "The Geography of NGO Activism against Multinational Corporations," World Bank Economic Review, World Bank Group, vol. 34(1), pages 143-163.
    13. Krautheim, Sebastian & Verdier, Thierry, 2016. "Offshoring with endogenous NGO activism," Journal of International Economics, Elsevier, vol. 101(C), pages 22-41.
    14. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    15. Gani ALDASHEV & Cecilia NAVARRA, 2018. "Development Ngos: Basic Facts," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 125-155, March.
    16. Igal Hendel & Saul Lach & Yossi Spiegel, 2017. "Consumers' activism: the cottage cheese boycott," RAND Journal of Economics, RAND Corporation, vol. 48(4), pages 972-1003, December.
    17. Seth Freedman & Melissa Kearney & Mara Lederman, 2012. "Product Recalls, Imperfect Information, and Spillover Effects: Lessons from the Consumer Response to the 2007 Toy Recalls," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 499-516, May.
    18. Matthew Gentzkow & Jesse M. Shapiro, 2006. "Media Bias and Reputation," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 280-316, April.
    19. repec:bla:annpce:v:89:y:2018:i:1:p:125-155 is not listed on IDEAS
    20. Couttenier, Mathieu & Hatte, Sophie, 2016. "Mass media effects on non-governmental organizations," Journal of Development Economics, Elsevier, vol. 123(C), pages 57-72.
    21. Carolyn L. Evans, 2003. "The Economic Significance of National Border Effects," American Economic Review, American Economic Association, vol. 93(4), pages 1291-1312, September.
    22. Sonal S. Pandya & Rajkumar Venkatesan, 2016. "French Roast: Consumer Response to International Con flict--Evidence from Supermarket Scanner Data," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 42-56, March.
    23. Graham, David & Woods, Ngaire, 2006. "Making corporate self-regulation effective in developing countries," World Development, Elsevier, vol. 34(5), pages 868-883, May.
    24. Gopinath, G. & Helpman, . & Rogoff, K. (ed.), 2014. "Handbook of International Economics," Handbook of International Economics, Elsevier, edition 1, volume 4, number 4.
    25. Heilmann, Kilian, 2016. "Does political conflict hurt trade? Evidence from consumer boycotts," Journal of International Economics, Elsevier, vol. 99(C), pages 179-191.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Koenig, Pamina & Poncet, Sandra, 2022. "The effects of the Rana Plaza collapse on the sourcing choices of French importers," Journal of International Economics, Elsevier, vol. 137(C).
    2. Pamina Koenig & Sandra Poncet, 2019. "Reputation and (un)fair trade: Effects on French importers from the Rana Plaza collapse," Post-Print halshs-02350112, HAL.
    3. Wenshou Yan & Yan Cai & Xuan Guo, 2023. "How can trade partners be chosen when facing food scandals? China's milk scandal as a natural experiment," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(4), pages 603-635, October.
    4. Cristian Ugarte & Marcelo Olarreaga & Gady Saiovici, 2023. "Child labour and global value chains," The World Economy, Wiley Blackwell, vol. 46(4), pages 941-968, April.
    5. Judah Brown & Brandon J. Sheridan, 2020. "The Impact of National Anthem Protests on National Football League Television Ratings," Journal of Sports Economics, , vol. 21(8), pages 829-847, December.
    6. Elisa Navarra, 2022. "Stock Market Response to Firms’ Misconduct," Working Papers ECARES 2022-40, ULB -- Universite Libre de Bruxelles.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pamina Koenig & Sandra Poncet, 2018. "Activism and Trade," Working Papers halshs-01959943, HAL.
    2. Pamina Koenig & Sandra Poncet, 2019. "Reputation and (un)fair trade: Effects on French importers from the Rana Plaza collapse," Post-Print halshs-02350112, HAL.
    3. Crozet, Matthieu & Hinz, Julian & Stammann, Amrei & Wanner, Joschka, 2021. "Worth the pain? Firms’ exporting behaviour to countries under sanctions," European Economic Review, Elsevier, vol. 134(C).
    4. Sophie Hatte & Pamina Koenig, 2020. "The Geography of NGO Activism against Multinational Corporations," The World Bank Economic Review, World Bank, vol. 34(1), pages 143-163.
    5. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.
    6. Pablo A. Peña & Saidé Salazar & Carlos Serrano, 2022. "Trump’s wall and gourmet coffee sales: The effect of a consumer boycott in Mexico," Economics and Politics, Wiley Blackwell, vol. 34(1), pages 113-141, March.
    7. Agnosteva, Delina E. & Anderson, James E. & Yotov, Yoto V., 2019. "Intra-national trade costs: Assaying regional frictions," European Economic Review, Elsevier, vol. 112(C), pages 32-50.
    8. Qi Sun & Fang Wu & Shanjun Li & Rajdeep Grewal, 2021. "Consumer Boycotts, Country of Origin, and Product Competition: Evidence from China’s Automobile Market," Management Science, INFORMS, vol. 67(9), pages 5857-5877, September.
    9. Koenig, Pamina & Poncet, Sandra, 2022. "The effects of the Rana Plaza collapse on the sourcing choices of French importers," Journal of International Economics, Elsevier, vol. 137(C).
    10. Anderson, James E. & Borchert, Ingo & Mattoo, Aaditya & Yotov, Yoto V., 2018. "Dark costs, missing data: Shedding some light on services trade," European Economic Review, Elsevier, vol. 105(C), pages 193-214.
    11. In Kyung Kim & Kyoo il Kim, 2022. "No Beer No Friends: Quantifying the Effect of the Beer Boycott," Journal of Industrial Economics, Wiley Blackwell, vol. 70(3), pages 711-751, September.
    12. Zijun Luo & Yonghong Zhou, 2020. "Decomposing the effects of consumer boycotts: evidence from the anti-Japanese demonstration in China," Empirical Economics, Springer, vol. 58(6), pages 2615-2634, June.
    13. Li, Haoran & Wan, Xibo & Zhang, Wendong, 2021. "How do Firms Respond to Long-term Political Tensions? Evidence from Chinese Food Importers," ISU General Staff Papers 202106020700001118, Iowa State University, Department of Economics.
    14. Fuchs, Andreas & Kaplan, Lennart & Kis-Katos, Krisztina & Schmidt, Sebastian S. & Turbanisch, Felix & Wang, Feicheng, 2020. "Mask wars: China's exports of medical goods in times of COVID-19," University of Göttingen Working Papers in Economics 398, University of Goettingen, Department of Economics.
    15. Lionel Fontagné & Gianluca Orefice & Roberta Piermartini, 2020. "Making small firms happy? The heterogeneous effect of trade facilitation measures," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 565-598, August.
    16. Pao-Li Chang & Tomoki Fujii & Wei Jin, 2022. "Good Names Beget Favors: The Impact of Country Image on Trade Flows and Welfare," Management Science, INFORMS, vol. 68(10), pages 7555-7596, October.
    17. Li, Haoran & Wan, Xibo & Zhang, Wendong, 2020. "How do Firms Respond to Political Tensions? Evidence from Chinese Food Importers," ISU General Staff Papers 202011250800001118, Iowa State University, Department of Economics.
    18. Sonali Chowdhry & Julian Hinz & Katrin Kamin, 2022. "Brothers in arms: The value of coalitions in sanctions regimes," RSCAS Working Papers 2022/62, European University Institute.
    19. Matthieu Crozet & Julian Hinz, 2020. "Friendly fire: the trade impact of the Russia sanctions and counter-sanctions," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 35(101), pages 97-146.
    20. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:pseptp:halshs-02301100. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Caroline Bauer (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.