Ashraf, Anik (2018) Three essays on firm productivity. PhD thesis, University of Warwick.

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Abstract

This thesis consists of three chapters. Chapter 1 aims to understand how performance-based ranking affect productivity of workers. While providing such ranking may induce workers to increase effort because of status concerns, such information may also demotivate them or make them wary of outperforming peers. This chapter disentangles the effects of demotivation, social conformity, and status associated with ranking. I implement a randomized experiment at a Bangladeshi sweater factory that pays employees on piece rates. Treated workers receive monthly information on their relative performance either in private or in public. A simple theoretical framework shows that intrinsic status concerns induce Private Treatment workers to increase or decrease effort depending on the feedback they receive from the intervention. Workers in Public Treatment respond similarly but face two additional incentives - social status (positive effect) and social conformity (negative effect). Empirical evidence shows that Private Treatment workers increased (decreased) effort upon receiving positive (negative) feedback. Public ranking led to lower net effort relative to Private Treatment because of a strong preference not to outperform friends. The negative effects from demotivation and social conformity may explain why the existing literature finds mixed evidence of impact of ranking workers.

In Chapter 2, we look at how firing of workers in an organization affect the productivity of the surviving co-workers. We take advantage of detailed individual-level production records from, and extensive fieldwork conducted at, a large Bangladeshi sweater factory before, during, and after several episodes of labour unrest that eventually led the management to fire approximately 25 percent of the labour force on the relevant production floor. Exploiting across-worker variation in exposure to colleagues' terminations, we document a negative impact of the firings on productivity of surviving workers. Fired co-workers' spatial proximity drives the results. Additional evidence rules out a number of competing mechanisms such as subsequent targeted punishments from management, loss of productive peers, or attention diverted to help recently hired and inexperienced co-workers. We argue that the effects are likely driven by workers' feelings of loss or anger towards the management.

Chapter 3 studies the relationship between external shocks, such as political strikes and labour unrest, and productivity in the ready-made garment sector in Bangladesh. Using data from 33 ready-made garment factories in Bangladesh and adopting an event-study approach, we document very little change in productivity or worker absenteeism during political strikes lasting two days or less. Productivity falls when strikes last five days or more. The main channel for such fall appears to be supply-chain disruptions rather than worker absenteeism. However, absenteeism and quality defect rates increase immediately during labour unrest, resulting in a decrease in output. As a benchmark comparison, we show that the drop in productivity from sustained strikes or labour unrest is equivalent to a fall in productivity due to an increase of about 7 degrees centigrade in temperature.

Item Type:	Thesis or Dissertation (PhD)
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor
Library of Congress Subject Headings (LCSH):	Labor productivity, Labor productivity -- Bangladesh, Industrial productivity, Industrial productivity -- Bangladesh, Employees -- Rating of, Employees -- Dismissal of, Performance -- Management, Strikes and lockouts
Official Date:	April 2018
Dates:	Date Event April 2018 Submitted
Institution:	University of Warwick
Theses Department:	Department of Economics
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Woodruff, Christopher ; Macchiavello, Rocco
Format of File:	pdf
Extent:	vii, 113 pages : charts
Language:	eng

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