Ethical Labor Practices and Competitive Performance in Cambodia’s Garment Industry: The Role of Supply Chain Risk
DOI:
https://doi.org/10.54691/wfdtzf61Keywords:
Ethical labor practices, Supply chain risk, Competitive performance, Cambodia, Garment industry, Global value chainsAbstract
Cambodia's garment industry holds a distinctive position in global value chains as one of the few export-oriented manufacturing sectors where labor standards compliance is formally integrated into trade preference agreements and buyer sourcing criteria. Despite this institutional framework, empirical research has yet to clarify whether ethical labor practices confer measurable competitive advantages at the firm level and, if so, through which mechanisms. Furthermore, the extent to which these practices serve as internal supply chain risk-mitigation strategies or generate competitive benefits via alternative pathways remains insufficiently understood. This study addresses these gaps by examining the relationships among ethical labor practices (ELP), internal supply chain risk (SCR), and competitive performance (CP) within Cambodia's garment sector. Drawing on stakeholder theory, the resource-based view, and supply chain risk management theory, a conceptual model is developed in which ELP is theorized to strengthen competitive performance both directly and indirectly, with internal supply chain risk serving as a mediating mechanism across three dimensions: delivery, process, and supply risk. To test this model, a cross-sectional quantitative survey was administered to 455 garment factory workers using an anonymized social-media distribution protocol. A Khmer-language instrument was developed using a four-stage validation process: item generation, expert content validity review, professional translation with back-translation, and pilot testing. This process produced a 35-item measure demonstrating strong psychometric properties across five constructs. Hypotheses were tested using hierarchical ordinary least squares regression. Mediation was assessed using the Sobel–Aroian procedure and bias-corrected, bootstrapped confidence intervals based on 5,000 resamples. The findings carry substantive implications for how scholars and practitioners understand the competitive logic of labor standards in buyer-driven global value chains, particularly whether the dominant performance mechanism operates through operational risk reduction or through alternative relational and market-access channels. By providing the first large-scale primary survey evidence on the ELP-CP relationship in Cambodia using a validated Khmer-language instrument, this study also contributes methodologically to labor-focused supply chain research in emerging economies.
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