Eelco Modderman, Cees Gorter, Jasper Dalhuisen and Peter Nijkamp
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…
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.