Production Goes Global, Compliance Stays Local: Private Regulation in the Global Electronics Industry

45 Pages Posted: 3 Jan 2012 Last revised: 7 Sep 2015

Greg Distelhorst

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Richard M. Locke

Brown University; Massachusetts Institute of Technology (MIT) - Department of Political Science

Timea Pal

European University Institute

Hiram M. Samel

Said Business School, University of Oxford

Date Written: June 8, 2015

Abstract

Poor working conditions in global supply chains have led to private initiatives that seek to regulate labor practices in developing countries. But how effective are these regulatory programs? We investigate the effects of transnational private regulation by studying Hewlett-Packard's (HP) supplier responsibility program. Using analysis of factory audits, interviews with buyer and supplier management, and field research at production facilities across seven countries, we find that national context – not repeated audits, capability building, or supply chain power – is the key predictor of workplace compliance. Quantitative analysis shows that factories in China are markedly less compliant than those in countries with stronger civil society and regulatory institutions. Comparative field research then illustrates how these local institutions complement transnational private regulation. Although these findings imply limits to private regulation in institutionally poor settings, they also highlight opportunities for productive linkages between transnational actors and local state and society.

Keywords: Transnational governance, globalization, labor standards, private regulation, corporate social responsibility

Suggested Citation

Distelhorst, Greg and Locke, Richard M. and Pal, Timea and Samel, Hiram M., Production Goes Global, Compliance Stays Local: Private Regulation in the Global Electronics Industry (June 8, 2015). MIT Political Science Department Research Paper No. 2012-1; Regulation & Governance. 9(3): 224-242.; MIT Political Science Department Research Paper No. 2012-1; Watson Institute for International Studies Research Paper No. 2014-13. Available at SSRN: https://ssrn.com/abstract=1978908 or http://dx.doi.org/10.2139/ssrn.1978908

Greg Distelhorst (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

77 Massachusetts Ave.
E62-416
Cambridge, MA 02142
United States

HOME PAGE: http://www.gregdistelhorst.com

Richard M. Locke

Brown University ( email )

111 Thayer Street
Box 1970
Providence, RI 02912-1970
United States
(401) 863-3596 (Phone)

Massachusetts Institute of Technology (MIT) - Department of Political Science ( email )

77 Massachusetts Avenue
Cambridge, MA 02139
United States

Timea Pal

European University Institute ( email )

Villa Schifanoia
133 via Bocaccio
Firenze (Florence), Tuscany 50014
Italy

Hiram M. Samel

Said Business School, University of Oxford ( email )

HOME PAGE: http://www.sbs.ox.ac.uk/community/people/hiram-samel

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