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Article
Publication date: 4 May 2012

Chor Foon Tang

The aim of this study is to empirically investigate the effect of real wages on labour productivity in Malaysia's manufacturing sector using annual data from 1980 to 2009.

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Abstract

Purpose

The aim of this study is to empirically investigate the effect of real wages on labour productivity in Malaysia's manufacturing sector using annual data from 1980 to 2009.

Design/methodology/approach

This study uses the Johansen cointegration test to examine the presence of long‐run equilibrium relationship between labour productivity and real wages in Malaysia. In addition, the Granger causality test within the vector error‐correction model (VECM) is used to ascertain the direction of causality between the variables of interest.

Findings

The Johansen test suggests that real wages and labour productivity are cointegrated. Moreover, labour productivity and real wages have a quadratic relationship (i.e. inverted U‐shaped curve) instead of linear relationship. Hence, the effect of real wages on labour productivity is non‐monotonic. Furthermore, the Granger causality test indicates that real wages and labour productivity are bilateral causality in nature.

Research limitations/implications

This study is limited to the labour productivity in the manufacturing sector only.

Originality/value

This study demonstrates that the effect of real wages on labour productivity is non‐monotonic; hence increase in real wages alone does not always enhance labour productivity. Thus, other incentives should be offered to stimulate long‐term labour productivity growth in Malaysia.

Details

International Journal of Social Economics, vol. 39 no. 6
Type: Research Article
ISSN: 0306-8293

Keywords

Open Access
Article
Publication date: 6 July 2023

Donghwan Ahn, Shiyong Yoo and Seungho Cho

This study investigates the effect of managerial ability on labor productivity by analyzing various methods in the firm-year panel data of listed firms in South Korea from 2002 to…

Abstract

This study investigates the effect of managerial ability on labor productivity by analyzing various methods in the firm-year panel data of listed firms in South Korea from 2002 to 2019. Managerial ability was analyzed using the measurement method of Demerjian et al. (2012), while labor productivity was analyzed using value-added and sales. The authors find that managerial ability has a positive effect on labor productivity. In other words, the productivity of employees improves with the appointment of a manager with higher abilities. The study’s findings suggest that firms should consider managerial ability as a means of improving labor productivity.

Details

Journal of Derivatives and Quantitative Studies: 선물연구, vol. 31 no. 3
Type: Research Article
ISSN: 1229-988X

Keywords

Article
Publication date: 6 December 2022

Phuong Thi Nguyen, Hung Viet Nguyen and Hoa Quynh Ha

This research identifies the level of labor misallocation in Vietnamese manufacturing sector for the period 2005–2019. The paper also examines the effects of labor misallocation…

Abstract

Purpose

This research identifies the level of labor misallocation in Vietnamese manufacturing sector for the period 2005–2019. The paper also examines the effects of labor misallocation on productivity in Vietnamese manufacturing firms controlled by industry- and firm-level factors.

Design/methodology/approach

The level of labor misallocation and efficiency gains in total factor productivity (TFP) are assessed using Vietnam's annual enterprise survey data for the period 2005–2019 and Hsieh and Klenow (2009) productivity decomposition framework.

Findings

The results indicate four main points. Firstly, labor misallocation tends to increase from 2005 to 2019. Secondly, labor misallocation by firm ownership and technology level is found to be highest in state-owned enterprise and low-tech industries, whereas foreign direct investment and high-tech firms have lowest labor misallocation. Labor misallocation in small- and medium-sized enterprises is higher than in large-sized enterprises and is equivalent to overall sample. Thirdly, labor misallocation decreases productivity in manufacturing firms. The firm-level factors such as bigger technology gap, external capital, firm scale and poor liquidity ratio decrease productivity in manufacturing firms. Whereas firm-level factors such as Vietnam's accession to the WTO, reasonable corporate tax structure, capital intensity, human capital and firm age increase productivity of manufacturing firms. The industry-level factors such as FDI horizontal, forward and supply backward spillovers promote productivity from foreign firms to domestic ones. Meanwhile, only backward linkages reduce productivity of firms. Finally, by difference-in-differences (DID) method, the result indicates foreign firms have higher average labor productivity than domestic firms before or after Vietnam's accession to the WTO. After joining WTO, the average labor productivity of foreign firms is increased by 854 million VND while the average labor productivity of domestic firms is increased by 895 million VND. The DID between the two groups (domestic firms and foreign firms) before and after Vietnam's accession to WTO is 41 million dong.

Research limitations/implications

The main limitation of the study is that the market is assumed perfectly competitive. The model focuses on selective factors affecting labor productivity.

Originality/value

The focus of many previous international research papers was generally to look at the level of labor misallocation in developed countries. However, knowledge about labor misallocation is limited, particularly in the context of developing countries. This paper examines the level of labor misallocation by region, ownership, level of technology and firm size on productivity and the effect of misallocation on productivity in Vietnamese manufacturing firms.

Peer review

The peer-review history for this article is available at: https://publons.com/publon/10.1108/IJSE-09-2021-0552.

Details

International Journal of Social Economics, vol. 50 no. 4
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 16 August 2022

Frank Mullins

This study investigates whether broad-based employee ownership (BBEO), in isolation and in conjunction with cash profit sharing (CPS), can enhance labor productivity in family…

Abstract

Purpose

This study investigates whether broad-based employee ownership (BBEO), in isolation and in conjunction with cash profit sharing (CPS), can enhance labor productivity in family firms over nonfamily firms.

Design/methodology/approach

Hypothesis testing was conducted using cross-sectional time-series regression with a matched sample of 393 family and nonfamily firms listed on the US S&P 500 over a five-year timeframe.

Findings

Overall, the findings indicate that BBEO does not increase labor productivity more in family firms compared to nonfamily firms in the short term; however, BBEO does enable family firms to experience greater labor productivity relative to nonfamily firms beyond the short term. Moreover, when BBEO is combined with CPS, labor productivity improves more for family firms than nonfamily firms both in the short term and beyond.

Originality/value

While prior studies have relied largely on agency theory, this study contributes to the literature on family firms and employee incentives by being amongst the first to draw upon temporal motivation theory to distinguish between family and nonfamily firms regarding the incentive effect of BBEO on labor productivity.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 29 no. 1
Type: Research Article
ISSN: 1355-2554

Keywords

Article
Publication date: 26 September 2022

R.V.K. Vigneshwar and S. Shanmugapriya

Proper prediction of productivity can enable the enhanced estimation, realistic scheduling, and accurate cost forecasting of construction processes. Due to the existence of…

Abstract

Purpose

Proper prediction of productivity can enable the enhanced estimation, realistic scheduling, and accurate cost forecasting of construction processes. Due to the existence of different labor sources (unionized and non-unionized), the prediction of productivity is still a significant problem in India. Moreover, the construction procurement processes and on-site performance are the predominant elements that can result in improved project outcomes. Thereby, the consideration of labor constraints and site conditions will play an important role in productivity improvement.

Design/methodology/approach

This study investigates the factors affecting construction site productivity. A total of 28 factors are grouped under 7 categories as follows: labor constraints, safety and quality procurements, material and equipment (ME), site management, project working condition, delay controls, construction methods and techniques, and external factors. Furthermore, by involving these factors, the questionnaire survey was conducted among Indian construction practitioners. As a result, 204 responses were received and the data were analyzed using a reliability test, relative importance index (RII), and analysis of variance (ANOVA).

Findings

The result of this study highlighted the importance of strategic construction management activities in terms of effective planning of ME, planning and realistic scheduling of construction activities, proper communication, information sharing, etc. Thus, this study provides a clear insight to the Indian construction practitioners in determining the effect of these site factors on the successful execution of their projects.

Originality/value

In this paper, the problem of construction productivity in India and its causes are explained effectively. This study examines the preference of labor contract, labor source, and most importantly, the factors affecting site productivity. Moreover, the other lagging issues regarding the management of construction activities are also described in detail.

Details

Engineering, Construction and Architectural Management, vol. 30 no. 2
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 6 November 2018

Junqing Yang and Hong Chen

This paper aims to examine whether rewards incentives of non-state-owned enterprises can settle the matters of motivation lack, strained labor relations and frequent labor-capital…

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Abstract

Purpose

This paper aims to examine whether rewards incentives of non-state-owned enterprises can settle the matters of motivation lack, strained labor relations and frequent labor-capital conflicts and realize co-win cooperation of workers, enterprises and the society.

Design/methodology/approach

Based on the data of 1,617 questionnaires in 257 enterprises, this research reveals the total rewards factors that affect the labor motivation of non-stated-owned enterprises in China and improve labor productivity by adopting the hierarchical linear regression analysis and multi-group path analysis, and establishes a new model of win-win cooperation between labor and capital and the society through the incentive function of these elements by stimulating the enthusiasm of workers, improving labor productivity, increasing profits, expanding capital accumulation and absorbing labor force.

Findings

The authors have discovered that in general the main incentives that stimulate the enthusiasm of employees are the factors of performance and recognition and development and career opportunity in total rewards. The factor of benefits also has a significant incentive effect on employees in the western area of China, migrant workers with lower education and male employees, but negative effect on the post-1990s employees in non-state-owned enterprises. However, the compensation factor should be used with caution when encouraging employees in eastern region and the post-1980s. The total rewards factors of development and career opportunities and the performance and the recognition and benefits should be used to motivate workers to improve labor productivity, increase corporate profits and absorb more labor force, which is a long-term solution to win-win cooperation between labor and capital and social sustainable development. It is an important way to increase profits and absorb more labor force by increasing employee’s human capital investment and improving labor proficiency of employees under age 45. The conclusions provide new effective management methods for non-state-owned enterprises in China.

Practical implications

As a consequence, it will encourage employees to improve labor productivity and increase profits and thus absorb more labor force, if we use these factors of performance and recognition, development and career opportunity and benefits integratedly, we will find a permanent solution that the two sides of the labor and management and the society enjoy a win-win cooperation.

Originality/value

The research will provide theoretical basis for non-state-owned enterprises to apply a new and effective management style so that we can establish a win-win cooperation between the labor and management. What’s more, the research will develop the Dual Economy Theory of Lewis and the employment theory of Keynes and will also provide a theoretical basis for the realization of Taylor’s harmonious industrial relations.

Details

Nankai Business Review International, vol. 10 no. 2
Type: Research Article
ISSN: 2040-8749

Keywords

Article
Publication date: 3 March 2022

Yot Amornkitvikai, Charles Harvie and Piyapong Sangkaew

The objectives of this study are to investigate the role of wages, skills development and R&D on the productivity of Thai manufacturing firms, using data from the 2017 Industrial…

Abstract

Purpose

The objectives of this study are to investigate the role of wages, skills development and R&D on the productivity of Thai manufacturing firms, using data from the 2017 Industrial Census of Thailand.

Design/methodology/approach

The paper uses two-stage least squares (2SLS) to examine the role of wages, skills development and R&D, as well as other vital factors, impacting productivity as measured by labour productivity and total factor productivity.

Findings

Thai manufacturing firms' technology in aggregate exhibits decreasing returns to scale. Increasing wages and skills development promote the labour productivity and total factor productivity (TFP) of Thai manufacturers. R&D is also shown to be vital in promoting the labour productivity and TFP of large firms, but not small firms. Foreign direct investment (FDI) and government support can significantly increase large and medium-sized firms' labour productivity and TFP. Financially constrained firms tend to perform more productively. However, older firms, larger firms, labour supply shortages and political instability adversely affect labour productivity and TFP.

Practical implications

Upskilling and improving HRD policies could move Thailand towards a knowledge-based and high-income country in the future. Intellectual property protection should be strengthened to boost the country's R&D. The government should consider lifting restrictions on FDI to encourage international openness. The Thai Board of Investment’s promotion should target Thai manufacturing firms and FDI.

Originality/value

This study is the first to examine in detail the role of wages, skills development and R&D on the productivity of Thai firms based on the 2017 Thailand Industrial Census.

Details

Journal of Economic Studies, vol. 50 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 1 February 1988

David Macarov

The author argues that we must stop and take a look at what our insistence on human labour as the basis of our society is doing to us, and begin to search for possible…

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Abstract

The author argues that we must stop and take a look at what our insistence on human labour as the basis of our society is doing to us, and begin to search for possible alternatives. We need the vision and the courage to aim for the highest level of technology attainable for the widest possible use in both industry and services. We need financial arrangements that will encourage people to invent themselves out of work. Our goal, the article argues, must be the reduction of human labour to the greatest extent possible, to free people for more enjoyable, creative, human activities.

Details

International Journal of Sociology and Social Policy, vol. 8 no. 2/3/4
Type: Research Article
ISSN: 0144-333X

Keywords

Article
Publication date: 29 May 2020

Farnad Nasirzadeh, H.M. Dipu Kabir, Mahmood Akbari, Abbas Khosravi, Saeid Nahavandi and David G. Carmichael

This study aims to propose the adoption of artificial neural network (ANN)-based prediction intervals (PIs) to give more reliable prediction of labour productivity using…

Abstract

Purpose

This study aims to propose the adoption of artificial neural network (ANN)-based prediction intervals (PIs) to give more reliable prediction of labour productivity using historical data.

Design/methodology/approach

Using the proposed PI method, various sources of uncertainty affecting predictions can be accounted for, and a PI is proposed instead of a less reliable single-point estimate. The proposed PI consists of a lower and upper bound in which the realization of the predicted variable, namely, labour productivity, is anticipated to fall with a defined probability and represented in terms of a confidence level (CL).

Findings

The proposed PI method is implemented on a case study project to predict labour productivity. The quality of the generated PIs for the labour productivity is investigated at three confidence levels. The results show that the proposed method can predict the value of labour productivity efficiently.

Practical implications

This study is the first attempt in construction management to undertake a shift from deterministic point predictions to interval forecasts to improve the reliability of predictions. The proposed PI method will help project managers obtain accurate and credible predictions of labour productivity using historical data. With a better understanding of future outcomes, project managers can adopt appropriate improvement strategies to enhance labour productivity before commencing a project.

Originality/value

Point predictions provided by traditional deterministic ANN-based forecasting methodologies may be unreliable due to the different sources of uncertainty affecting predictions. The current study proposes ANN-based PIs as an alternative and robust tool to give a more reliable prediction of labour productivity using historical data. Using the proposed method, various sources of uncertainty affecting the predictions are accounted for, and a PI is proposed instead of a less reliable single point estimate.

Details

Engineering, Construction and Architectural Management, vol. 27 no. 9
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 12 February 2018

Naveed Iqbal, Mansoor Ahmad, Matthew M.C. Allen and Muhammad Mustafa Raziq

Drawing on data from a unique, large-scale survey, the purpose of this paper is to examine the links between e-HRM and perceived labour productivity both directly and through the…

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Abstract

Purpose

Drawing on data from a unique, large-scale survey, the purpose of this paper is to examine the links between e-HRM and perceived labour productivity both directly and through the mediating role of HR service quality amongst commercial-bank workplaces in Pakistan, many of which have introduced e-HRM.

Design/methodology/approach

The authors use partial least squares structural equation modelling to examine the direct links between e-HRM and productivity as well as the mediated links between e-HRM, perceived HR service quality and productivity.

Findings

The authors show that e-HRM practices have a statistically significant, positive effect on managers’ perceptions of labour productivity. The authors also reveal that e-HRM practices influence the quality of HR service, and that the quality of HR services fully mediates the relationship between e-HRM practices and managers’ perceptions of labour productivity.

Practical implications

The results highlight the importance of designing and implementing e-HRM systems so that they support organisation workflow and enable workers to carry out a range of HR and non-HR activities more efficiently. In particular, this study suggests that managers should focus on how e-HRM impacts on HR service quality in a holistic way, as this is the “route” via which e-HRM can improve labour productivity.

Originality/value

Existing research has demonstrated a link between e-HRM and the quality of HR services; however, these studies downplay the potential impact of e-HRM on labour productivity, a key organisational outcome and one that e-HRM aims to improve. This study contributes to the HRM literature by identifying how e-HRM can improve labour productivity by enhancing the perceived HR service quality. This study, therefore, provides the basis for future theory developments in this area.

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