Chinese Unions and Enterprises Performance

This paper uses the national firm level survey data to investigate the effects of Chinese unions on firm performance. We show that Chinese unions have a strong "State-Party voice" face and a "collective voice" face but lack of "monopoly" face. The government influence plays an important role in unionization. The empirical findings on the effectiveness of unions are remarkable: unions in the workplace significantly improve productivity but reduce enterprise profitability. Moreover, the presence of unions in same region and industry generates negative spillovers on enterprise performance.