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

  • Julia Lane
  • Robert Feinberg
  • Harry Broadman

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.

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Article provided by Taylor & Francis Journals in its journal International Journal of the Economics of Business.

Volume (Year): 9 (2002)
Issue (Month): 2 ()
Pages: 225-237

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Handle: RePEc:taf:ijecbs:v:9:y:2002:i:2:p:225-237
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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 777-95, December.
  2. Julia Lane & Harry G. Broadman & Inderjit Singh, 1998. "Labor Flexibility, Ownership and Firm Performance in China," Review of Industrial Organization, Springer, vol. 13(6), pages 621-635, December.
  3. 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.
  4. 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.
  5. 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.
  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 915-38, October.
  7. Lane, Julia & Parkin, Michael, 1998. "Turnover in an Accounting Firm," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 702-17, October.
  8. 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.
  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. Will Bartlett & Saul Estrin & John Cable & Stephen Smith, 1992. "Labor-managed cooperatives and private firms in north central Italy: An empirical comparison," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(1), pages 103-118, October.
  11. Julia I. Lane & Alan G. Isaac & David W. Stevens, 1996. "Firm Heterogeneity and Worker Turnover," Labor and Demography 9602001, EconWPA.
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