Document Type

Journal article

Source Publication

China Economic Review

Publication Date

2006

Volume

17

Issue

3

First Page

281

Last Page

299

Publisher

Elsevier

Keywords

Labor restructuring, Political control, State owned enterprises

Abstract

This study examines the determinants behind the restructuring of China's SOEs in the late 1990s. We have reached two 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 offer evidence that decisions on 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. Our results suggest that corporatized SOEs with partial private ownership may enjoy higher autonomy in labor decisions.

DOI

10.1016/j.chieco.2006.04.004

Print ISSN

1043951X

E-ISSN

18737781

Publisher Statement

Copyright © 2006 Elsevier Inc

Access to external full text or publisher's version may require subscription.

Full-text Version

Accepted Author Manuscript

Recommended Citation

Hu, Y., Opper, S., & Wong, S. M. L. (2006). Political economy of labor retrenchment: Evidence based on China's state-owned enterprises. China Economic Review, 17(3), 281-299. doi: 10.1016/j.chieco.2006.04.004