IDEAS home Printed from https://ideas.repec.org/a/bla/manchs/v86y2018i6p699-721.html
   My bibliography  Save this article

Labour Unions and Firm Productivity: Evidence from China

Author

Listed:
  • Chih‐Hai Yang
  • Meng‐Wen Tsou

Abstract

This study investigates the effect of labour unions on productivity across various types of firm ownership in China. Using a panel dataset of Chinese manufacturing firms covering 2004–2007 and employing propensity score matching techniques, we find that unions have a negative impact on labour productivity and total factor productivity. From a dynamic viewpoint, unionisation has an initially positive or nonsignificant association with productivity, but then has a significant negative effect in subsequent years for both foreign‐owned enterprises and private firms. A strong and negative productivity effect is consistently observed for state‐owned enterprises.

Suggested Citation

  • Chih‐Hai Yang & Meng‐Wen Tsou, 2018. "Labour Unions and Firm Productivity: Evidence from China," Manchester School, University of Manchester, vol. 86(6), pages 699-721, December.
    • Handle: RePEc:bla:manchs:v:86:y:2018:i:6:p:699-721
    DOI: 10.1111/manc.12225
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/manc.12225
    Download Restriction: no
    File URL: https://libkey.io/10.1111/manc.12225?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Richard B. Freeman & James L. Medoff, 1979. "The Two Faces of Unionism," NBER Working Papers 0364, National Bureau of Economic Research, Inc.
    2. Lu, Yi & Tao, Zhigang & Wang, Yijiang, 2010. "Union effects on performance and employment relations: Evidence from China," China Economic Review, Elsevier, vol. 21(1), pages 202-210, March.
    3. Morikawa, Masayuki, 2010. "Labor unions and productivity: An empirical analysis using Japanese firm-level data," Labour Economics, Elsevier, vol. 17(6), pages 1030-1037, December.
    4. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    5. Connolly, Robert A & Hirsch, Barry T & Hirschey, Mark, 1986. "Union Rent Seeking, Intangible Capital, and Market Value of the Firm," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 567-577, November.
    6. Jefferson, Gary H. & Rawski, Thomas G. & Li, Wang & Yuxin, Zheng, 2000. "Ownership, Productivity Change, and Financial Performance in Chinese Industry," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 786-813, December.
    7. Richard B. Freeman, 2005. "What Do Unions Do?-- The 2004 M-Brane Stringtwister Edition," Journal of Labor Research, Transaction Publishers, vol. 26(4), pages 641-668, November.
    8. Sunghoon Kim & Jian Han & Longkai Zhao, 2014. "Union Recognition by Multinational Companies in China: A Dual Institutional Pressure Perspective," ILR Review, Cornell University, ILR School, vol. 67(1), pages 34-59, January.
    9. Yang Yao & Ninghua Zhong, 2013. "Unions and Workers' Welfare in Chinese Firms," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 633-667.
    10. DU, Julan & LU, Yi & TAO, Zhigang & YU, Linhui, 2012. "Do domestic and foreign exporters differ in learning by exporting? Evidence from China," China Economic Review, Elsevier, vol. 23(2), pages 296-315.
    11. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    12. Ying Ge, 2014. "Do Chinese Unions Have “Real” Effects On Employee Compensation?," Contemporary Economic Policy, Western Economic Association International, vol. 32(1), pages 187-202, January.
    13. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    14. Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
    15. John Budd & Wei Chi & Yijiang Wang & Qianyun Xie, 2014. "What Do Unions in China Do? Provincial-Level Evidence on Wages, Employment, Productivity, and Economic Output," Journal of Labor Research, Springer, vol. 35(2), pages 185-204, June.
    16. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(2), pages 261-294.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jirjahn, Uwe, 2024. "Corporate Globalization and Worker Representation," IZA Discussion Papers 16727, Institute of Labor Economics (IZA).
    2. Tsou, Meng-Wen & Yang, Chih-Hai, 2019. "Does gender structure affect firm productivity? Evidence from China," China Economic Review, Elsevier, vol. 55(C), pages 19-36.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert J. R. Elliott & Liza Jabbour & Liyun Zhang, 2016. "Firm productivity and importing: Evidence from Chinese manufacturing firms," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(3), pages 1086-1124, August.
    2. Dettmann, E. & Becker, C. & Schmeißer, C., 2011. "Distance functions for matching in small samples," Computational Statistics & Data Analysis, Elsevier, vol. 55(5), pages 1942-1960, May.
    3. Kodjo Adandohoin & Vigninou Gammadigbe, 2022. "The revenue efficiency consequences of the announcement of a tax transition reform: The case of WAEMU countries," African Development Review, African Development Bank, vol. 34(S1), pages 195-218, July.
    4. Wang, Wen & Lien, Donald, 2018. "Union membership, union coverage and wage dispersion of rural migrants: Evidence from Suzhou industrial sector," China Economic Review, Elsevier, vol. 49(C), pages 96-113.
    5. Yang, Yong & Driffield, Nigel, 2022. "Leveraging the benefits of location decisions into performance: A global view from matched MNEs," Journal of Business Research, Elsevier, vol. 139(C), pages 468-483.
    6. Kazuhiko Yokota & Kyosuke Kurita & Shujiro Urata, 2016. "In Search of the Learning-by-Exporting Effect: Role of Economies of Scale and Technology," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-27, June.
    7. Andy W. Chan & Ed Snape & Michelle S. Luo & Yujuan Zhai, 2017. "The Developing Role of Unions in China's Foreign-Invested Enterprises," British Journal of Industrial Relations, London School of Economics, vol. 55(3), pages 602-625, September.
    8. Oberst, Christian A. & Schmitz, Hendrik & Madlener, Reinhard, 2019. "Are Prosumer Households That Much Different? Evidence From Stated Residential Energy Consumption in Germany," Ecological Economics, Elsevier, vol. 158(C), pages 101-115.
    9. Wendimu, Mengistu Assefa & Henningsen, Arne & Gibbon, Peter, 2016. "Sugarcane Outgrowers in Ethiopia: “Forced” to Remain Poor?," World Development, Elsevier, vol. 83(C), pages 84-97.
    10. Arnstein Aassve & Maria A. Davia & Maria Iacovou & Stefano Mazzuco, 2007. "Does Leaving Home Make You Poor? Evidence from 13 European Countries," European Journal of Population, Springer;European Association for Population Studies, vol. 23(3), pages 315-338, October.
    11. Sushanta Mallick & Yong Yang, 2013. "Productivity Performance of Export Market Entry and Exit: Evidence from Indian Firms," Review of International Economics, Wiley Blackwell, vol. 21(4), pages 809-824, September.
    12. Song, Yang & Yang, Jidong & Yang, Qijing, 2016. "Do firms' political connections depress the union wage effect? Evidence from China," China Economic Review, Elsevier, vol. 38(C), pages 183-198.
    13. Feddersen, Arne & Maennig, Wolfgang, 2012. "Sectoral labour market effects of the 2006 FIFA World Cup," Labour Economics, Elsevier, vol. 19(6), pages 860-869.
    14. Driffield, Nigel & Love, James H. & Yang, Yong, 2016. "Reverse international knowledge transfer in the MNE: (Where) does affiliate performance boost parent performance?," Research Policy, Elsevier, vol. 45(2), pages 491-506.
    15. R. Antonietti & D. Antonioli, 2007. "Conditional Leptokurtosis in Energy Prices: Multivariate Evidence from Futures Markets," Working Papers 594, Dipartimento Scienze Economiche, Universita' di Bologna.
    16. Tony Fang & Ying Ge & Youqing Fan, 2019. "Unions and the productivity performance of multinational enterprises: evidence from China," Asian Business & Management, Palgrave Macmillan, vol. 18(4), pages 281-300, September.
    17. Yong Yang & Sushanta Mallick, 2010. "Export Premium, Self‐selection and Learning‐by‐Exporting: Evidence from Chinese Matched Firms," The World Economy, Wiley Blackwell, vol. 33(10), pages 1218-1240, October.
    18. Dong, Zhiqiang & Luo, Zijun & Wei, Xiahai, 2016. "Social insurance with Chinese characteristics: The role of communist party in private firms," China Economic Review, Elsevier, vol. 37(C), pages 40-51.
    19. Patrice Laroche, 2020. "Unions, Collective Bargaining and Firm Performance," Post-Print hal-03058266, HAL.
    20. Balsmeier, Benjamin, 2017. "Unions, collective relations laws and R&D investment in emerging and developing countries," Research Policy, Elsevier, vol. 46(1), pages 292-304.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:manchs:v:86:y:2018:i:6:p:699-721. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/semanuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.