A rising number of firms from developing countries have adopted voluntary private
standards in the last decade. This has become an area of active research, especially in terms of the
impact of private standards on trade, organizational performance, and employee outcomes. This
paper analyses how standards affect labour productivity of small and medium firms from the food
sector in Viet Nam. The results based on a 3-year panel show that the application of private
standards improves labour productivity. These gains primarily occur to firms operating above a
threshold labour-intensity level. Firms with low labour intensity are not likely to experience gains
in labour productivity from standards. This implies that employee compensation increase due to
standards is a likely mechanism for labour productivity gains. The results are robust to several
specification changes and instrumental variable estimation.