Performance Spillovers and Social Network in the Workplace: Evidence from Rural and Urban Weavers in a Chinese Textile Firm
AbstractWe provide some of the first rigorous evidence on performance spillovers and social network in the workplace. The data we use are rather extraordinary – weekly data for rejection rates (proportion of defective output) for all weavers in a firm during a 12 months (April 2003-March 2004) period, more than 10,000 observations. Our fixed effect estimates first point to significant spillovers of performance from high-ability weavers to low-ability weavers. On the other hand, we find no evidence for performance spillovers from low-ability to high-ability weavers. The findings are consistent with the knowledge sharing hypothesis that low-ability workers learn from high-ability workers but not vice versa. Second, by exploiting the well-documented fact that an exogenously-formed sharp divide between urban workers and rural migrant workers exists in firms in Chinese cities, we find that performance spillovers/knowledge sharing take place only within the confines of social network. Specifically rural low-ability weavers are found to improve their performance as their high-ability teammates (who are also rural migrants) improve their performance while they do not benefit from performance improvement of their high-ability teammates who are urban residents. Such heterogeneous performance interdependence of workers within the same team suggests that our evidence for performance spillovers is less likely to be a result of team specific demand shocks that generate spurious performance interdependence of all team members.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3340.
Length: 34 pages
Date of creation: Feb 2008
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Find related papers by JEL classification:
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-15 (All new papers)
- NEP-CNA-2008-03-15 (China)
- NEP-DEV-2008-03-15 (Development)
- NEP-KNM-2008-03-15 (Knowledge Management & Knowledge Economy)
- NEP-LAB-2008-03-15 (Labour Economics)
- NEP-SOC-2008-03-15 (Social Norms & Social Capital)
- NEP-URE-2008-03-15 (Urban & Real Estate Economics)
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