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PurposeBased on a sample of foreign‐financed manufacturing firms in southern China, the purpose of this paper is to study the effects of ISO certification on productivity.Design/methodology/approachThe paper employs the stochastic frontier approach to estimate frontier efficiency scores at firm level.FindingsThe empirical results suggest that the implementation of ISO was able to improve firms' productivity in the form of a wholly disembodied shift of the production frontier. The results further show that there was a mildly positive embodied shift of the production frontier due to the effects of ISO on the marginal product of labor. However, the embodied effects of ISO on the marginal product of capital were not significant.Research limitations/implicationsThe sample size is small and the data were collected from southern China. A generalization of results to other parts of China should be interpreted with caution. Despite the limited degree of generalization, firms with ISO certifications are suggested to be aware of certain flexibility in the implementation of the ISO documented procedures.Practical implicationsThe findings of the paper should be of general interest to firms seeking or adopting ISO system or other international standards.Originality/valueThe originality of the paper resides in the fact that the empirical work investigates the embodied effects of ISO certification on the marginal product of labor and capital.

This study presents empirical evidence on the effects of incentives on industrial productivity in China's food industry. Data covering the 1990‐1996 period were collected from 30 food enterprises in Guangdong Province. The empirical results support the use of bonus schemes to motivate enterprises to achieve higher levels of productivity. Moreover, the study indicates an important variable affecting productivity: the proportion of temporary workers in the total labour force. It was found that flexibility in the use of temporary workers could produce a positive effect on enterprise productivity. This finding strongly supports the need for flexibility in employment policies. When compared to state‐owned and collective‐owned enterprises, their counterparts, e.g. foreign ventures and joint‐stock enterprises, were relatively more efficient in production.

In this paper, an attempt is made to determine the minimum living requirements (or poverty lines) of workers in China by adopting the Extended Linear Expenditure System. Comparison between the actual minimum wage levels implemented by the Chinese government and the estimated minimum living requirements in this paper reveal that, in early 2010, workers in 23 out of 35 sample cities were paid minimum wages below the estimated lowest poverty line. This group of workers is unable to afford minimum payments to meet basic living conditions for survival as their minimum wages were below the estimated survival line. To protect workers, the Chinese government is advised to address employee provisions for basic living needs. (J Contemp China/GIGA)

Based on a representative sample of the 238 largest foreign-invested toy manufacturing firms in southern China by output value, we adopted a two-stage approach to examine the role of leverage on firm performance as measured by technical efficiency, and the effect of efficiency on profitability. In the first stage, we use data envelopment analysis (DEA) to estimate the technical efficiency of the sample firms. In the second stage, we conduct a regression analysis to study the effects of leverage on efficiency and of efficiency on profitability. Our empirical results support the view that leverage has a positive effect on firm technical efficiency and that there is a positive relationship between technical efficiency and profitability. (J Contemp China/GIGA)