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

  • Kato, Takao

    ()

    (Colgate University)

  • Shu, Pian

    ()

    (MIT)

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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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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  1. Gary Charness & Marie-Claire Villeval, 2009. "Cooperation and Competition in Intergenerational Experiments in the Field and the Laboratory," Working Papers 0931, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  2. 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.
  3. 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.
  4. James L. Medoff & Katharine G. Abraham, 1980. "Experience, Performance, and Earnings," NBER Working Papers 0278, National Bureau of Economic Research, Inc.
  5. Gary Bornstein & Uri Gneezy & Rosemarie Nagel, 1999. "The effect of intergroup competition on group coordination: An experimental study," Economics Working Papers 393, Department of Economics and Business, Universitat Pompeu Fabra.
  6. Jonathan Guryan & Kory Kroft & Matthew J. Notowidigdo, 2009. "Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 34-68, October.
  7. 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.
  8. Jones, Derek & Kato, Takao, 2007. "The Impact of Teams on Output, Quality and Downtime: An Empirical Analysis Using Individual Panel Data," Working Papers 104-24, Department of Economics, Colgate University.
  9. Reuben, Ernesto & Tyran, Jean-Robert, 2010. "Everyone is a winner: Promoting cooperation through all-can-win intergroup competition," European Journal of Political Economy, Elsevier, vol. 26(1), pages 25-35, March.
  10. Ingrid Nielsen & Chris Nyland & Russell Smyth & Mingqiong Zhang & Cherrie Jiuhua Zhu, 2006. "Effects of Intergroup Contact on Attitudes of Chinese Urban Residents to Migrant Workers," Urban Studies, Urban Studies Journal Limited, vol. 43(3), pages 475-490, March.
  11. Rosemary Batt, 1999. "Work Organization, Technology, and Performance in Customer Service and Sales," ILR Review, Cornell University, ILR School, vol. 52(4), pages 539-564, July.
  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. repec:bla:restud:v:77:y:2010:i:2:p:417-458 is not listed on IDEAS
  14. 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.
  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, vol. 109(4), pages 881-919, November.
  16. 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.
  17. Tan, Jonathan H.W. & Bolle, Friedel, 2007. "Team competition and the public goods game," Economics Letters, Elsevier, vol. 96(1), pages 133-139, July.
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