The Political Economy of Labor Employment Decisions: Evidence from China
研究发现，中国国有企业通过限制裁员来维持社会稳定，导致劳动力成本更粘性，且政治关联经理人加剧这一效应，政府随后以补贴回报企业。
In China’s transitional economy, one of the major objectives of the government is to maintain social stability. We hypothesize that, through state ownership and appointment of executives, Chinese government officials can influence firms’ labor employment decisions by limiting layoffs when firms’ sales decline. Consistent with this hypothesis, we find that state-owned enterprises (SOEs) have stickier labor costs than non-SOEs, and the presence of politically connected managers makes labor costs even stickier in SOEs while having little effect in non-SOEs. Such effects are stronger in regions with weak market institutions and during time periods when government officials are to be promoted. We also show that the government reciprocates SOEs’ sticky labor policies with subsequent subsidies. This paper was accepted by Suraj Srinivasan, accounting.