The Research on the Influence of Chairman’s Hometown Identity on Labor Cost Stickiness of State-owned Enterprises
DOI:
https://doi.org/10.62051/cvxt5y57Keywords:
State-Owned Enterprises; Hometown Identity; Cost Stickiness; Salary Adjustment.Abstract
This paper investigates the impact of the chairman’s hometown identity on labor cost stickiness within Chinese state-owned enterprises (SOEs). Using a sample of Shanghai and Shenzhen A-share listed SOEs from 2007 to 2023, the empirical results show that SOEs with local chairmen exhibit weaker labor cost stickiness. This finding remains robust after a series of robustness checks, including instrumental variable analysis, PSM tests, HDFE models, and alternative measures for the key explanatory variable. Mechanism tests reveal that local chairmen reduce labor cost stickiness primarily through salary reductions rather than layoffs. Moderation effect analyses confirm that local chairmen, by sharing a cultural background with employees and thus gaining their trust and support, can effectively reduce labor cost stickiness. Finally, a series of heterogeneity analyses are conducted from three perspectives: external supervision, market environment, and internal corporate governance. The results indicate that when firms face negative conditions such as weak external supervision, poor market environments, or inferior internal governance, the informal institution of the chairman’s hometown identity becomes effective, significantly reducing labor cost stickiness.
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