Unionisation and Firm Performance in China’s Manufacturing Industries

Using firm level data, this paper examines the link between unionisation and firm performance in China’s manufacturing industries. The empirical results suggest that unionisation has not greatly benefitted workers in China’s textile industry but it has contributed to much larger increase in average wages in both domestic and foreign invested firms in communication equipment, computer and other electronic equipment manufacturing industry. In the case of the general equipment manufacturing industry, unionised domestic firms pay higher average wages but there is no link between unionisation and average wage in foreign invested firms.