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
TypeArticle
TitleWorkforce size adjustment as a strategic response to exchange rate shocks: a strategy-tripod application to Chinese firms
AuthorsHe, 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.

PublisherElsevier
JournalJournal of Business Research
ISSN0148-2963
Publication dates
Online16 Sep 2021
Print01 Jan 2022
Publication process dates
Deposited09 Sep 2021
Accepted06 Sep 2021
Output statusPublished
Accepted author manuscript
License
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
LanguageEnglish
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