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

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

Article

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

Publication dates
Type	Article
Title	Workforce size adjustment as a strategic response to exchange rate shocks: a strategy-tripod application to Chinese firms
Authors	He, X., Rizov, M. and Zhang, X.
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.
Keywords	HR strategy; Workforce adjustment ; Exchange rate shocks; Soft budget constraint; Chinese firms
Publisher	Elsevier
Journal	Journal of Business Research
ISSN	0148-2963
Electronic	1873-7978
Online	16 Sep 2021
Print	01 Jan 2022
Publication process dates
Submitted	02 Mar 2021
Accepted	06 Sep 2021
Deposited	09 Sep 2021
Output status	Published
Accepted author manuscript	final 1.pdf License CC BY-NC-ND 4.0 File Access Level Open
Copyright Statement	© 2021. This manuscript version is made available under the CC-BY-NC-ND 4.0 license https://creativecommons.org/licenses/by-nc-nd/4.0/
Digital Object Identifier (DOI)	https://doi.org/10.1016/j.jbusres.2021.09.013
Web of Science identifier	WOS:000702865900017
Language	English

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