The mediating effect of psychological contract in the relationships between paternalistic leadership and turnover intention for foreign workers in Taiwan

To help resolve its labor shortage problems, Taiwan has been using foreign workers since 1989, and the number of foreign workers coming to Taiwan has been increasing in recent years. This study investigates the relationships between paternalistic leadership, psychological contract and turnover intention for Indonesian workers in Taiwan. The samples were 363 valid questionnaires received. We use the structural equation model (SEM) to empirically explore the relationships. The results show that moral paternalistic leadership positively affects the psychological contract; that authoritarian paternalistic leadership also positively affects the psychological contract, and authoritarian paternalistic leadership positively affects turnover intention. In addition, the psychological contract fully mediates the relationship between paternalistic leadership (moral and authoritarian) and turnover intention. These research findings are also examined by the moderating effect for paternalistic leadership (moral and authoritarian) and turnover intention.