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Do Labour Strategies Matter? An Analysis of Two Enterprise-Level Data Sets in China

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  • Julia Lane
  • Robert Feinberg
  • Harry Broadman

Abstract

This paper examines the effect of labour strategies and management types on firm performance in Chinese enterprises. We use two large panel surveys on Chinese enterprises, spanning almost two decades of transition. Our findings suggest that, as commonly thought, there are significant differences across ownership types in China in the degree to which flexible labour market strategies are utilized; and more flexible strategies (such as bonus-reward systems) do seem to significantly enhance performance. However, after controlling for different degrees of labour market flexibility, ownership differences have little influence on enterprise performance (with the exception that foreign joint ventures clearly outperform other types in growth and labour productivity). This important result suggests that the impact of Chinese ownership types on performance is felt through cost-impacts rather than via direct differences in competitive behaviour or the goals of enterprise decision-makers.

Suggested Citation

  • Julia Lane & Robert Feinberg & Harry Broadman, 2002. "Do Labour Strategies Matter? An Analysis of Two Enterprise-Level Data Sets in China," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(2), pages 225-237.
  • Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:225-237
    DOI: 10.1080/13571510210134661
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    References listed on IDEAS

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    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Boardman, Anthony E & Vining, Aidan R, 1989. "Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 1-33, April.
    3. Julia I. Lane & Alan G. Isaac & David W. Stevens, 1996. "Firm Heterogeneity and Worker Turnover," Labor and Demography 9602001, EconWPA.
    4. Lane, Julia & Parkin, Michael, 1998. "Turnover in an Accounting Firm," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 702-717, October.
    5. Haltiwanger, John C. & Lane, Julia I. & Spletzer, James R., 2007. "Wages, productivity, and the dynamic interaction of businesses and workers," Labour Economics, Elsevier, vol. 14(3), pages 575-602, June.
    6. Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-938, October.
    7. Cable, J. R., 1988. "Is profit-sharing participation? : Evidence on alternative firm types from West Germany," International Journal of Industrial Organization, Elsevier, vol. 6(1), pages 121-137, March.
    8. Putterman, Louis & Skillman, Gil Jr., 1988. "The incentive effects of monitoring under alternative compensation schemes," International Journal of Industrial Organization, Elsevier, vol. 6(1), pages 109-119, March.
    9. Smith, Stephen C., 1994. "Innovation and market strategy in Italian industrial cooperatives: Econometric evidence on organizational comparative advantage," Journal of Economic Behavior & Organization, Elsevier, vol. 23(3), pages 303-320, May.
    10. Julia Lane & Harry G. Broadman & Inderjit Singh, 1998. "Labor Flexibility, Ownership and Firm Performance in China," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(6), pages 621-635, December.
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