OPENING FACTORY DOORS TO GOVERNMENT REGULATION: AN EXPERIMENT ON PARTICIPATION BY FIRMS IN THE DESIGN OF LABOR PROTECTION IN VIETNAM
Regulatory non-compliance by firms causes grave dangers for surrounding communities in emerging economies. This paper describes the results of a two-year experiment in Vietnam, which tests the possibility that firms asked to give feedback on a draft regulation are subsequently more likely to comply with the resulting costs and constraints imposed by government. Study results indicate that participating firms were significantly more likely to: 1) allow inspections by chemical safety experts working for a business association affiliated with the government; 2) have a higher level of compliance with costlier requirements; and 3) have improved their view of government legitimacy over the study period.
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Eddy Malesky is an associate professor of political economy at Duke University. He has published in leading political science and economic journals, including the American Political Science Review and Journal of Politics, and has been awarded the Harvard Academy Fellowship and Gabriel Almond Award for best dissertation in comparative politics. Malesky serves as the lead researcher for the Vietnam Provincial Competitiveness Index and is a noted specialist in the political development in Vietnam and China, comparative political economy in Southeast Asia, as well as economic transitions in developing economies.
Markus Taussig teaches Strategy, Entrepreneurial Finance, and International Business at NUS Business School. He has been with NUS since 2011, when he graduated his Doctorate in Business Administration from Harvard Business School. He also holds a Masters in International Economics and Southeast Asian Studies from Johns Hopkins University’s School for Advanced International Studies and a BA in Politics from Oberlin College. He has lived in Asia for 15 years, including 11 in Vietnam. His published articles have appeared in Strategic Management Journal, Journal of Law, Economics, and Organization, Journal of Economic Literature, Journal of East Asian Studies, and Business Horizons.