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Competition, Group Identity, and Social Networks in the Workplace: Evidence from a Chinese Textile Firm

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  • Kato, Takao

    ()
    (Colgate University)

  • Shu, Pian

    ()
    (MIT)

Abstract

Using data on team assignment and weekly output for all weavers in an urban Chinese textile firm between April 2003 and March 2004, this paper studies a) how randomly assigned teammates affect an individual worker's behavior under a tournament-style incentive scheme, and b) how such effects interact with exogenously formed social networks in the manufacturing workplace. First, we find that a worker's performance improves when the average ability of her teammates increases. Second, we exploit the exogenous variations in workers' origins in the presence of the well-documented social divide between urban resident workers and rural migrant workers in large urban Chinese firms, and show that the coworker effects are only present if the teammates are of a different origin. In other words, workers do not act on pecuniary incentives to outperform teammates who are from the same social network. Our results point to the important role of group identities in overcoming self-interests and facilitating altruistic behavior.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6219.

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Length: 37 pages
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:iza:izadps:dp6219

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Related research

Keywords: coworker effects in the workplace; social networks; intergroup competition;

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  1. Medoff, James L & Abraham, Katharine G, 1980. "Experience, Performance, and Earnings," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 95(4), pages 703-36, December.
  2. Bornstein, Gary & Gneezy, Uri & Nagel, Rosmarie, 2002. "The effect of intergroup competition on group coordination: an experimental study," Games and Economic Behavior, Elsevier, vol. 41(1), pages 1-25, October.
  3. Harry J. Paarsch & Bruce S. Shearer, 1999. "The Response of Worker Effort to Piece Rates: Evidence from the British Columbia Tree-Planting Industry," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 643-667.
  4. Jones, Derek C. & Kato, Takao, 2007. "The Impact of Teams on Output, Quality and Downtime: An Empirical Analysis Using Individual Panel Data," IZA Discussion Papers 2917, Institute for the Study of Labor (IZA).
  5. Tan, Jonathan H.W. & Bolle, Friedel, 2007. "Team competition and the public goods game," Economics Letters, Elsevier, vol. 96(1), pages 133-139, July.
  6. Gary Charness & Marie Claire Villeval, 2009. "Cooperation and Competition in Intergenerational Experiments in the Field and the Laboratory," Post-Print halshs-00464388, HAL.
  7. Lu, Zhigang & Song, Shunfeng, 2006. "Rural-urban migration and wage determination: The case of Tianjin, China," China Economic Review, Elsevier, vol. 17(3), pages 337-345.
  8. 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, .
  9. Ernesto Reuben & Jean-Robert Tyran, 2008. "Everyone Is A Winner: Promoting Cooperation Through Non-Rival Intergroup Competition," Discussion Papers 08-26, University of Copenhagen. Department of Economics.
  10. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
  11. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2010. "Social Incentives in the Workplace," Review of Economic Studies, Oxford University Press, vol. 77(2), pages 417-458.
  12. Eric P. Bettinger & Bridget Terry Long, 2005. "Do Faculty Serve as Role Models? The Impact of Instructor Gender on Female Students," American Economic Review, American Economic Association, vol. 95(2), pages 152-157, May.
  13. Jonathan Guryan & Kory Kroft & Matt Notowidigdo, 2007. "Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments," NBER Working Papers 13422, National Bureau of Economic Research, Inc.
  14. repec:bla:restud:v:77:y:2010:i:2:p:417-458 is not listed on IDEAS
  15. Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(4), pages 881-919, November.
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