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Performance Spillovers and Social Network in the Workplace: Evidence from Rural and Urban Weavers in a Chinese Textile Firm

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Author Info

  • Kato, Takao

    ()
    (Colgate University)

  • Shu, Pian

    ()
    (MIT)

Abstract

We 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 Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3340.

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Length: 34 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3340

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Keywords: knowledge sharing; performance spillovers; social network;

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References

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Citations

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Cited by:
  1. Hesselius, Patrik & Johansson, Per & Nilsson, Peter, 2009. "Sick of your colleagues' absence?," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2009:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Rieck, Karsten Marshall Elseth & Vaage, Kjell, 2012. "Social Interactions At The Workplace: Exploring Sickness Absence Behavior," Working Papers in Economics, University of Bergen, Department of Economics 11/12, University of Bergen, Department of Economics.
  3. Fidan Ana Kurtulus, 2011. "What Types of Diversity Benefit Workers? Empirical Evidence on the Effects of Co-Worker Dissimilarity on the Performance of Employees," UMASS Amherst Economics Working Papers, University of Massachusetts Amherst, Department of Economics 2011-11, University of Massachusetts Amherst, Department of Economics.

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