Standards compliance, participation in the global value chain and the value-added of labour: evidence from Vietnam’s small-and-medium-sized enterprises

Abstract

Purpose – The authors investigate the impact of standards compliance on the participation in the global value chain and labour value-added of Vietnam’s small and medium-sized enterprises (SMEs). Design/methodology/approach – The authors use a three-period panel dataset of SMEs combined with Vietnam’s Provincial Competitiveness Index. The authors also use multiple econometric models; and with each model, the authors include all independent variables that are available from the study's data and that are suggested by the literature. Findings – The authors find that standards compliance by Vietnam’s SMEs improved their participation in the global value chain via subcontracts with FDI multinational firms. The authors also find that standards compliance improved the value-added of labour in Vietnam’s SMEs, which is robust to the choice of econometric models. Practical implications – The study's results suggest that better outcomes for firms and society will be possible if standards are recognised and respected. Originality/value – This paper complements scant literature on the impact of standards compliance on global value chain participation via subcontracting work and labour value-added, especially in developing countries.

Keywords

• Compliance
• Global value chain
• Productivity
• SME
• Standards
• Vietnam