Summary
Global consumers, international brands, and governments in producing and outsourcing
countries aim to improve working conditions in global value chains, but uncertainty exists about what is
the best approach. This research uses firm-level data from the International Labour Organization-
International Finance Corporation Better Work Vietnam program to assess the relationship between
transparency on working conditions and firm compliance in the apparel sector in Vietnam between 2010
and 2018. It exploits a change in the policies of Better Work Vietnam when, in 2015, the program
announced the launch of a new public disclosure program that would see factories’ names made publicly
available along with their compliance (or lack thereof) with certain “critical issues.” The paper first
examines which firm characteristics correlate with reductions in noncompliance rates over time, and then
examines the impact of the public disclosure policy on compliance rates and firm dropout using different
empirical techniques. It finds that while continued participation in the Better Work Vietnam program has
the strongest effect on changes in firm compliance with labor standards over time, public disclosure is
also associated with increased compliance, with stronger effects in some compliance points, including
occupational health and safety, work time, and child labor. There is some evidence of increased dropout,
but no evidence of firms only making progress on the critical issues is found. The research findings suggest
that public disclosure within global value chains matters for firm behavior.