Workforce size adjustments as a strategic response to exchange rate shocks: A strategy-tripod application to Chinese firms

He, X.; Rizov, M.; Zhang, X.

doi:10.1016/j.jbusres.2021.09.013

Workforce size adjustments as a strategic response to exchange rate shocks: A strategy-tripod application to Chinese firms

He, X.; Rizov, M.; Zhang, X.

Authors

Professor Xinming He xinming.he@durham.ac.uk
Professor

M. Rizov

X. Zhang

Abstract

How firms use workforce size adjustment as a strategic response to external shocks such as exchange-rate fluctuations is an important but not yet fully understood topic. To address the void in the literature, we apply the strategy tripod theoretical framework, which sees the external shocks as an industrial impact, the budget constraints as an institutional force, and the firm leverage as an organisational capability to examine the firms’ strategic response in terms of workforce size adjustment in the Chinese economy context. Based on longitudinal data of Chinese manufacturing firms, our analysis finds that facing exchange rate shocks, firms with hard budget constraint are more responsive in adjusting their workforce than firms with soft budget constraint. Furthermore, highly levered firms, with hard budget constraint, will adjust their workforce more aggressively than firms with less debt in their financial structure.

Citation

He, X., Rizov, M., & Zhang, X. (2022). Workforce size adjustments as a strategic response to exchange rate shocks: A strategy-tripod application to Chinese firms. Journal of Business Research, 138, 203-213. https://doi.org/10.1016/j.jbusres.2021.09.013

Journal Article Type	Article
Acceptance Date	Sep 6, 2021
Online Publication Date	Sep 16, 2021
Publication Date	2022-01
Deposit Date	Sep 7, 2021
Publicly Available Date	Mar 16, 2023
Journal	Journal of Business Research
Print ISSN	0148-2963
Publisher	Elsevier
Peer Reviewed	Peer Reviewed
Volume	138
Pages	203-213
DOI	https://doi.org/10.1016/j.jbusres.2021.09.013
Public URL	https://durham-repository.worktribe.com/output/1235624

Files

Accepted Journal Article (441 Kb)
PDF

Publisher Licence URL
http://creativecommons.org/licenses/by-nc-nd/4.0/

Copyright Statement
© 2021 This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/