Labour manoeuvrability and economic performance: A test on township village enterprises in China

Abstract

Purpose

The aim of this paper is to explain the relationship between economic performance and labour manoeuvrability of township‐village enterprises in the Jiangsu province, People's Republic of China.

Design/methodology/approach

After a concise general overview of recent economic developments in the Chinese economy and the functioning of labour markets, a statistical analysis was performed on economic performance and labour market conditions based on a sample of 103 enterprises in the area considered.

Findings

The analysis shows that the flexibility to fire employees has a considerable impact on the rise in added value of the enterprises, whereas hiring flexibility appears to have negligible effects.

Research limitations/implications

Although the paper has a limited scope related to one Chinese province, it seems plausible that the results – a positive economic effect of deregulation – have a more general validity, but this would call for a broader comparative study across sectors and regions.

Originality/value

The paper thus offers a novel contribution to a better understanding of the economic performance after the fast changes in the Chinese economy.

Citation

Modderman, E., Gorter, C., Dalhuisen, J. and Nijkamp, P. (2007), "Labour manoeuvrability and economic performance: A test on township village enterprises in China", International Journal of Social Economics, Vol. 34 No. 4, pp. 220-236. https://doi.org/10.1108/03068290710734190