دانلود رایگان مقاله انگلیسی ارتقای سیاسی و بهره وری سرمایه گذاری کار - الزویر 2018

ABSTRACT

This study investigates the effect of political promotion incentives on the labor investment efficiency of firms by focusing on human capital misallocation. We show that 1) promotion incentives of local politicians significantly increase firm-level employment growth and decrease labor investment efficiency. 2) Causality is established using the number of death toll in local mining accidents to isolate exogenous shocks on the promotion incentives of local politicians, and placebo tests further confirm the causality. 3) For under-hiring firms, promotion incentives only increase the employment of low human capital, thus distorting human capital structure and decreasing labor investment efficiency. 4) Our findings are robust to alternative specifications. Overall, we highlight the political economy channel of human capital misallocation from the perspective of career concerns of local politicians.

6. Conclusions

Focusing on human capital misallocation, this study examines the effect of political promotion incentives on labor investment efficiency at firm level. The empirical results show that the incentive accompanying the political promotion of local politicians significantly decreases the labor investment efficiency of local firms. The observed relationship remains in over-hiring and underhiring firms. We prove that the promotion incentive of local politicians indeed enhances the number of firm employees, especially those with low human capital, which causes the failure of local firms in reaching the optimal allocation of the labor force. Further evidence suggests that the distortion of labor structure conditional on political promotion does not benefit either over-hiring or under-hiring firms in labor investment efficiency. Through instrument variable based on fatal accidents in the coal mine and placebo tests, we document consistent results after identifying the causality and controlling omitted variables. Cross-sectional tests show that the effect of political promotion incentive on labor investment efficiency is more pronounced for stated-owned firms, regular promotions, promotions during the periods of NCCPC, and politicians with high education level. Overall, this study identifies the mechanism behind the change of labor investment efficiency of Chinese firms from a political economy perspective.