IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v139y2024ics0264999324001652.html
   My bibliography  Save this article

Strategic alliance, agency problems, and labor investment efficiency

Author

Listed:
  • Chen, Wenrui
  • Chen, Zhiwu
  • Qin, Ling
  • Shan, Yaowen
  • Xu, Weihang

Abstract

Inter-firm strategic alliances, which are formed to facilitate resource allocation and improve efficiency, may also inadvertently lead to labor investment inefficiencies due to increased agency conflicts and managerial opportunism. Using a sample of Chinese firms, we find that strategic alliances significantly reduce labor investment efficiency by 4.5%. The reduction in labor investment efficiency takes the form of reduced revenue-generating capacity per unit of labor, overhiring of labor, and increased labor cost stickiness. Consistent with the agency view, we find that the negative effects of strategic alliances are more pronounced under weak corporate governance and high information asymmetry among alliance partners. Overall, the results highlight the complex dynamics of inter-firm strategic alliances and provide practical insights for improving labor investment efficiency in the context of inter-firm cooperation.

Suggested Citation

  • Chen, Wenrui & Chen, Zhiwu & Qin, Ling & Shan, Yaowen & Xu, Weihang, 2024. "Strategic alliance, agency problems, and labor investment efficiency," Economic Modelling, Elsevier, vol. 139(C).
    • Handle: RePEc:eee:ecmode:v:139:y:2024:i:c:s0264999324001652
    DOI: 10.1016/j.econmod.2024.106809
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999324001652
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2024.106809?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Strategic alliances; Labor investment efficiency; Agency problems; Informed decision making;
    All these keywords.

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

    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:eee:ecmode:v:139:y:2024:i:c:s0264999324001652. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    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.