Autonomy and Incentives in Chinese State Enterprises

Groves, Theodore; Hong, Yun Sik; McMillan, John; Naughton, Barry

doi:10.2307/2118432

Cited by 626 publications

(304 citation statements)

References 5 publications

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“…Empirically, a large number of studies have shown that bonuses are positively correlated with employees' performance (Groves et al, 1994;Baker et al, 1988;Banker et al, 2000;Enis, 1993;Jones and Kato, 1995;Kahn and Sherer, 1990). Furthermore, beyond providing monetary incentives, experiments also show that a bonus can also trigger gift-exchange considerations and induce some agents to expend more effort than under an incentive contract (Fehr et al (2007)).…”

Section: Introductionmentioning

confidence: 99%

Paying with Self-Chosen Goals: Incentives and Gender Differences

2015

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To boost employees' performance, firms often offer monetary bonuses when production goals are reached. However, the evidence suggests that the particular level of a goal is critical to the effectiveness of this practice. Goals must be challenging yet achievable. Computing optimal goals when employees have private information about their own abilities is often not feasible for the firm. To solve this problem, we propose a compensation scheme in which workers set their own production goals. We provide a simple model of self-chosen goals and test its predictions in the laboratory. The evidence we find in the laboratory confirms our model's predictions for men, but not for women. Men exert greater effort under the self-chosen goal contract system than under a piece rate contract. In contrast, women perform worse under the self-chosen goal contract. Further analysis suggests that this is because women fail to set goals that are challenging enough, because they are less likely to update their goals to take into account their improving performance as they repeat the task. JEL: C91, C92, J16, J24.

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Section: Introductionmentioning

confidence: 99%

Paying with Self-Chosen Goals: Incentives and Gender Differences

2015

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“…In the 1980s, the effort focused mainly on providing better incentives to SOE managers (see Groves et al, 1994Groves et al, , 1995. In the 1990s, to deepen the reforms, a greater effort was made towards restructuring SOE governance (Qian, 1996(Qian, , 2000 It is critical to understand that incorporation is not equivalent to privatization and that rapid growth does not equal high efficiency.…”

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confidence: 99%

Ownership, performance and executive turnover in China

Chi

Wang

2009

Journal of Asian Economics

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Abstract:To better understand the relationship between different types of firm ownership and management turnover, this study classifies ownership along two dimensions: the type of owner and the concentration of ownership. Within this framework, a unique data set is used to study the impact of management turnover on a company's performance. This study, in addition to confirming some of the results from previous studies, includes interesting and important new results. Most importantly, it finds evidence that the sensitivity of CEO turnover to performance is weaker in statecontrolled firms than in non-state firms, and varies according to different subtypes of private ownership. We also demonstrate that the turnover-performance relationship is curvilinear in ownership concentration, but that this relationship moves in opposite directions under state and private ownership. Important policy implications of these findings are discussed.

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“…Wages paid to workers may be increasingly tied to firm performance and more reflective of individual productivity due to tightening of budget constraints on SOCEs, increased competition and more openness to foreign trade (see Groves, Hong, McMillan and Naughton, 1994;Gang, Lunati and O'Connor, 1998;Benson and Zhu, 1999). Comin, Groshen, and Rabin (2009) show that firm-level instability increased after 1980 in the U.S. (particularly for large firms with volatile sales), corresponding to a period of higher transitory variance of labor earnings documented in the U.S. Violante (2002) shows that skillneutral technological change could result in an increase in the variance of the transitory component of earnings.…”

Section: Earnings Decomposition Resultsmentioning

confidence: 99%

Income Uncertainty and Household Savings in China

Chamon²,

Prasad³

2010

IMF Working Papers

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 5331 November 2010 ABSTRACT Income Uncertainty and Household Savings in China *China's household saving rate has increased markedly since the mid-1990s and the agesaving profile has become U-shaped. Using a panel of urban Chinese households covering 1989-2006, we document a sharp increase in income uncertainty. While the permanent variance of household income was stable, the transitory variance rose sharply. Based on these estimates, we calibrate a buffer-stock savings model and show that rising income uncertainty and pension reforms lead younger and older households, respectively, to raise their saving rates. These two factors account for over half of the increase in China's urban household savings rate and the U-shaped age-profile of savings.JEL Classification: D91, J3, E21

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Autonomy and Incentives in Chinese State Enterprises

Cited by 626 publications

References 5 publications

Paying with Self-Chosen Goals: Incentives and Gender Differences

Paying with Self-Chosen Goals: Incentives and Gender Differences

Ownership, performance and executive turnover in China

Income Uncertainty and Household Savings in China

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