The Impact of China's Millennium Labour Restructuring Program on Firm Performance and Employee Earnings

Around the turn of the century, China experienced perhaps the largest labour restructuring program in the world. This paper uses a new dataset of Chinese industrial enterprises to examine what leads to downsizing, and tries to understand the effects of labour downsizing on firms' technical effi...

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Main Authors:	Dong, Xiao-Yuan, Xu, Lixin Colin
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Labor Turnover Vacancies Layoffs J630 Firm Performance: Size, Diversification, and Scope L250 Socialist Systems and Transitional Economies: Factor and Product Markets Industry Studies Population P230 Socialist Enterprises and Their Transitions P310
Online Access:	http://hdl.handle.net/10986/5671

id	okr-10986-5671
recordtype	oai_dc
spelling	okr-10986-56712021-04-23T14:02:23Z The Impact of China's Millennium Labour Restructuring Program on Firm Performance and Employee Earnings Dong, Xiao-Yuan Xu, Lixin Colin Labor Turnover Vacancies Layoffs J630 Firm Performance: Size, Diversification, and Scope L250 Socialist Systems and Transitional Economies: Factor and Product Markets Industry Studies Population P230 Socialist Enterprises and Their Transitions P310 Around the turn of the century, China experienced perhaps the largest labour restructuring program in the world. This paper uses a new dataset of Chinese industrial enterprises to examine what leads to downsizing, and tries to understand the effects of labour downsizing on firms' technical efficiency, financial performance and employee wages. We find that downsizing is more prevalent in state-owned enterprises (SOEs), and is more likely when enterprises are older, larger and have higher excess capacity. For both SOEs and private firms, downsizing is more likely when the prices of their products drop, but private firms respond more dramatically. Moreover, downsizing has serious short-term costs in terms of total factor productivity (TFP). For mild downsizing, private firms suffer more deterioration in productivity. The distribution of surplus after downsizing is more favourable to labour in SOEs. For severe downsizing, both SOEs and private firms exhibit lower TFP growth with similar magnitudes. Our findings imply that private firms emphasize profit goals, while SOEs place a greater weight on labour protection. 2012-03-30T07:33:58Z 2012-03-30T07:33:58Z 2008 Journal Article Economics of Transition 09670750 http://hdl.handle.net/10986/5671 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Labor Turnover Vacancies Layoffs J630 Firm Performance: Size, Diversification, and Scope L250 Socialist Systems and Transitional Economies: Factor and Product Markets Industry Studies Population P230 Socialist Enterprises and Their Transitions P310
spellingShingle	Labor Turnover Vacancies Layoffs J630 Firm Performance: Size, Diversification, and Scope L250 Socialist Systems and Transitional Economies: Factor and Product Markets Industry Studies Population P230 Socialist Enterprises and Their Transitions P310 Dong, Xiao-Yuan Xu, Lixin Colin The Impact of China's Millennium Labour Restructuring Program on Firm Performance and Employee Earnings
geographic_facet	China
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	Around the turn of the century, China experienced perhaps the largest labour restructuring program in the world. This paper uses a new dataset of Chinese industrial enterprises to examine what leads to downsizing, and tries to understand the effects of labour downsizing on firms' technical efficiency, financial performance and employee wages. We find that downsizing is more prevalent in state-owned enterprises (SOEs), and is more likely when enterprises are older, larger and have higher excess capacity. For both SOEs and private firms, downsizing is more likely when the prices of their products drop, but private firms respond more dramatically. Moreover, downsizing has serious short-term costs in terms of total factor productivity (TFP). For mild downsizing, private firms suffer more deterioration in productivity. The distribution of surplus after downsizing is more favourable to labour in SOEs. For severe downsizing, both SOEs and private firms exhibit lower TFP growth with similar magnitudes. Our findings imply that private firms emphasize profit goals, while SOEs place a greater weight on labour protection.
format	Journal Article
author	Dong, Xiao-Yuan Xu, Lixin Colin
author_facet	Dong, Xiao-Yuan Xu, Lixin Colin
author_sort	Dong, Xiao-Yuan
title	The Impact of China's Millennium Labour Restructuring Program on Firm Performance and Employee Earnings
title_short	The Impact of China's Millennium Labour Restructuring Program on Firm Performance and Employee Earnings
title_full	The Impact of China's Millennium Labour Restructuring Program on Firm Performance and Employee Earnings
title_fullStr	The Impact of China's Millennium Labour Restructuring Program on Firm Performance and Employee Earnings
title_full_unstemmed	The Impact of China's Millennium Labour Restructuring Program on Firm Performance and Employee Earnings
title_sort	impact of china's millennium labour restructuring program on firm performance and employee earnings
publishDate	2012
url	http://hdl.handle.net/10986/5671
_version_	1764395899428012032

The Impact of China's Millennium Labour Restructuring Program on Firm Performance and Employee Earnings

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