Details

Autor(en) / Beteiligte

• Koenig, Pamina
• Poncet, Sandra

Titel

Social responsibility scandals and trade

Ist Teil von

• World development, 2019-12, Vol.124, p.104640, Article 104640

Ort / Verlag

Oxford: Elsevier Ltd

Erscheinungsjahr

2019

Link zum Volltext

Quelle

PAIS Index

Beschreibungen/Notizen

• •This paper provides the first analysis of the impact of social responsibility scandals on the imports of consumer products.•The collapse of the Rana Plaza building in April 2013, generated massive consumer mobilization against neglecting firms.•We use a difference-in-difference methodology to compare the apparel imports of two groups of countries before and after the collapse.•Our results highlight a relative decrease in imports, concentrated in the origin countries of companies related to the Rana Plaza.•The intensity of NGO campaigning is shown to enhance the trade-reducing effect. 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.