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

Author

Listed:
  • 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.

Suggested Citation

  • Kato, Takao & Shu, Pian, 2008. "Performance Spillovers and Social Network in the Workplace: Evidence from Rural and Urban Weavers in a Chinese Textile Firm," IZA Discussion Papers 3340, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3340
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    References listed on IDEAS

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    Cited by:

    1. Hesselius, Patrik & Johansson, Per & Nilsson, Peter, 2009. "Sick of your colleagues' absence?," Working Paper Series 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 11/12, University of Bergen, Department of Economics.
    3. Romano, Richard E. & Tampieri, Alessandro, 2016. "Arts vs engineering: Choosing consumption of and investment in education," Research in Economics, Elsevier, pages 493-510.
    4. 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 2011-11, University of Massachusetts Amherst, Department of Economics.

    More about this item

    Keywords

    knowledge sharing; performance spillovers; social network;

    JEL classification:

    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - 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

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