Activism and Trade

Pamina KOENIG, Sandra PONCET

Research output: Working paperWorking paper series

Abstract

This paper studies the effect of activism 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 hypothesize that this episode was a main shock in the perceived quality of clothing producers sourcing in Bangladesh. Using detailed import flows on textile goods from OECD countries, we analyze
whether the imports of consumer products were affected by the disclosure of information, in countries differently exposed to the collapse. To proxy the amount of information received by individuals in different countries, we use the
nationality of the firms involved in the Rana Plaza building: soon after the disaster, NGOs and the media insisted on the origin countries of the neglecting companies, publishing the list of misbehaving firms by nationality.

We use a difference-in-difference approach to compare the imports from Bangladesh of countries having been differently associated in the news to the Rana Plaza collapse. Results show a post-disaster decrease in imports for countries whose firms were directly involved in the Rana Plaza building. The effect has to be interpreted relatively to the evolution of imports of similar countries, however not linked to the collapsed Rana Plaza knitting factories. 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. No such differential pattern is observed for non-textile goods. Our results are robust to a variety of checks.
Original languageEnglish
Publication statusPublished - Mar 2019
Externally publishedYes

Publication series

NameCEPII Working Paper series
No.2019-04
ISSN (Electronic)1293-2574

Fingerprint

Import
Activism
Bangladesh
Disaster
Consumer products
Nationality
Country of origin
Disruption
OECD countries
Non-governmental organizations
Difference-in-differences
Industry
Factory
Sourcing
News
Disclosure
Knitting
Mobilization
Perceived quality

Keywords

  • activism
  • multinational firms
  • trade
  • imports
  • clothing industry

Cite this

KOENIG, P., & PONCET, S. (2019). Activism and Trade. (CEPII Working Paper series; No. 2019-04).
KOENIG, Pamina ; PONCET, Sandra. / Activism and Trade. 2019. (CEPII Working Paper series; 2019-04).
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KOENIG, P & PONCET, S 2019 'Activism and Trade' CEPII Working Paper series, no. 2019-04.

Activism and Trade. / KOENIG, Pamina; PONCET, Sandra.

2019. (CEPII Working Paper series; No. 2019-04).

Research output: Working paperWorking paper series

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KOENIG P, PONCET S. Activism and Trade. 2019 Mar. (CEPII Working Paper series; 2019-04).