Political Economy of Labor Retrenchment:Evidence Based on China's State-Owned Enterprises
37 Pages Posted: 15 Jan 2005
Date Written: November 2004
Abstract
This study examines the determinants of the restructuring of China's SOEs in the late 1990s. Our study yields four major findings. First, we find that the degree of labor retrenchment is negatively related to enterprise performance, suggesting that poor performance is a major force driving labor restructuring. Second, we find that market competition is related to both traditional and corporatized SOEs, suggesting that market competition gradually becomes an effective disciplinary force for managers of China's SOEs. Furthermore, we offer evidence that decisions about labor retrenchment in traditional SOEs are related to the local government's fiscal position and to local reemployment conditions for laid-off workers. In contrast, labor decisions in corporatized SOEs are not related to these two variables. This suggests that corporatized SOEs with partial private ownership seem to enjoy higher autonomy in labor decisions.
Keywords: Political Control, State Owned Enterprises, Labor Restructuring
JEL Classification: P26, P31, G38
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
From State to Market: A Survey of Empirical Studies on Privatization
-
Enterprise Restructuring in Transition: A Quantitative Survey
By Simeon Djankov and Peter Murrell
-
Enterprise Restructuring in Transition: A Quantitative Survey
By Simeon Djankov and Peter Murrell
-
Russian Privatization and Corporate Governance: What Went Wrong?
By Bernard S. Black, Reinier Kraakman, ...
-
How Does Privatization Work? Evidence from the Russian Shops
By Nicholas Barberis, Maxim Boycko, ...
-
By Joseph P. H. Fan and T.j. Wong
-
By Enrico C. Perotti and Bruno Biais