What?
Micro-evidence for the phenonmenon of “hoàng hôn nhiệm kỳ”, where soe directors recruit more employees just before their retirement.
Why?
A big literature has been devoted to measure the effects of term limits on politicians’ behavior. The worldwide phenomenon of soe privatization may also play a role. However, empirical evidence is wanting in low-income countries.
How?
Data: Vietnam Enterprises Census (vec) in 2011 and 2013. These are the only data sets that contain demographic data about the directors of enterprises, including age, gender, ethnicity and education. Suplement data include the The Viet Nam Provincial Governance and Public Administration Performance Index (papi).
Using ols to estimate on the log of number of employes. There is endogeneity problem in estimating the effects of terms limit to output. The solution is to use ages of directors as the main explainatory variable, which should be exogenous. Some notable control variables include: directors’ level of educations, ethnicity, year, log of total assets, log of total revenue; interaction terms with privatization statuses and papi. Standard errors are clustered at the firms-level.
And?
- Male soe directors, particularly at the age of 59, employ more workers before retirement (20% more than the number that 55-years-old directors hire before retirement).
- They do this to take bribes. The labor excess is not associated with an increase in firm employment.
This post is in the collection of my public reading notes.