A tough pill to swallow? The impact of voluntary occupational health and safety management system on firms’ financial performance in fashion and textiles industries

    Research output: Journal article publicationJournal articleAcademic researchpeer-review

    32 Citations (Scopus)

    Abstract

    The purpose of this paper is to investigate the impacts of voluntary Occupational Health and Safety Management System (OHSMS) certification (i.e. OHSAS 18001) on fashion and textiles-related companies’ financial performance. From all US-listed fashion and textiles-related companies, 44 companies that obtained OHSAS 18001 certification were used as samples. A long-horizon event study was conducted to estimate the sample companies’ abnormal changes of sales and return-on-assets (ROA) over non-OHSAS 18001 adopters in the same industry. The authors found that OHSAS 18001 adoption has a positive impact on fashion and textiles-related company's sales performance. Nevertheless, the OHSAS 18001 adoption has a negative impact on the company's ROA performance. Because of the increasing fashion customers’ attention on the occupational health and safety (OHS) issues on personal goods, such as fashion, apparel and beauty products, major fashion brands and retailers often require their suppliers to implement a voluntary OHSMS, in order to avoid any OHS scandal, such as sweatshops and child labour. However, the impacts of OHSMS on fashion and textiles-related manufacturers have never been examined empirically. The paper provides the first empirical evidence of impacts of OHSAS 18001 on fashion and textiles-related companies’ financial performances.

    Original languageEnglish
    Pages (from-to)128-140
    Number of pages13
    JournalJournal of Fashion Marketing and Management: An International Journal
    Volume16
    Issue number2
    DOIs
    Publication statusPublished - 4 May 2012

    Keywords

    • Ethical supply chain
    • Fashion
    • Financial performance
    • Occupational health and safety
    • OHSAS 18001
    • Supply chain management
    • Textiles
    • United States of America

    ASJC Scopus subject areas

    • Business and International Management
    • Marketing

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