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Employee stock ownership and corporate performance among public companies

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Author Info

  • Joseph Blasi
  • Michael Conte
  • Douglas Kruse
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    Abstract

    This study compares the corporate performance in 1990/91 of two groups of public companies: those in which employees owned more than 5% of the company's stock, and all others. The results of the analysis, which looks at profitability, productivity, and compensation, are consistent with neither negative nor highly positive views of employee ownership, but where differences are found, they are favorable to companies with employee ownership, especially among companies of small size. The circumstances in which employee ownership was used-specifically, whether it was part of a wage/benefit concession package and whether it was involved in a takeover threat-do not appear to have had a significant effect on the 1990 performance levels or 1980-90 performance growth of the firms. Although the authors caution that the data do not permit clear tests of causality, these results are broadly consistent with those of past studies. (Abstract courtesy JSTOR.)

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    Bibliographic Info

    Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

    Volume (Year): 50 (1996)
    Issue (Month): 1 (October)
    Pages: 60-79

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    Handle: RePEc:ilr:articl:v:50:y:1996:i:1:p:60-79

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    Cited by:
    1. Joseph R. Blasi & Douglas L. Kruse & Richard B. Freeman, 2010. "Epilogue (and Prologue)," NBER Chapters, in: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options, pages 377-386 National Bureau of Economic Research, Inc.
    2. Stoyu I. Ivanov & Janis K. Zaima, 2011. "Analysis of the effects of ESOP adoption on the company cost of capital," Managerial Finance, Emerald Group Publishing, vol. 37(2), pages 173-188, February.
    3. Richard B. Freeman, 2008. "When workers share in profits: effort and responses to shirking," LSE Research Online Documents on Economics 28499, London School of Economics and Political Science, LSE Library.
    4. Simon Burgess & Marisa Ratto, 2003. "The Role of Incentives in the Public Sector: Issues and Evidence," The Centre for Market and Public Organisation 03/071, Department of Economics, University of Bristol, UK.
    5. Douglas Kruse & Joseph Blasi & Richard B. Freeman, 2004. "Monitoring colleagues at work: profit-sharing, employee ownership, broad-based stock options and workplace performance in the United States," LSE Research Online Documents on Economics 19943, London School of Economics and Political Science, LSE Library.
    6. Olivia S. Mitchell & Stephen P. Utkus, 2002. "The Role of Company Stock in Defined Contribution Plans," NBER Working Papers 9250, National Bureau of Economic Research, Inc.
    7. Hand, John R.M., 2008. "Give everyone a prize? Employee stock options in private venture-backed firms," Journal of Business Venturing, Elsevier, vol. 23(4), pages 385-404, July.
    8. Meng, Rujing & Ning, Xiangdong & Zhou, Xianming & Zhu, Hongquan, 2011. "Do ESOPs enhance firm performance? Evidence from China's reform experiment," Journal of Banking & Finance, Elsevier, vol. 35(6), pages 1541-1551, June.
    9. Robert Buchele & Douglas Kruse & Loren Rodgers & Adria Scharf, 2009. "Show Me the Money: Does Shared Capitalism Share the Wealth?," NBER Working Papers 14830, National Bureau of Economic Research, Inc.
    10. Smith, Stephen C. & Cin, Beom-Cheol & Vodopivec, Milan, 1997. "Privatization Incidence, Ownership Forms, and Firm Performance: Evidence from Slovenia," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 158-179, October.
    11. Rauh, Joshua D., 2006. "Own company stock in defined contribution pension plans: A takeover defense?," Journal of Financial Economics, Elsevier, vol. 81(2), pages 379-410, August.
    12. Hsiang-Lan Chen & Yen-Sheng Huang, 2006. "Employee stock ownership and corporate R&D expenditures: evidence from Taiwan's information-technology industry," Asia Pacific Journal of Management, Springer, vol. 23(3), pages 369-384, September.
    13. Nicolas Aubert & Thomas Rapp, 2008. "Les salariés actionnaires:pourquoi investissent-ils dans leur entreprise?," Revue Finance Contrôle Stratégie, revues.org, vol. 11(4), pages 87-110, December.
    14. Djaoudath Alidou, 2011. "Les augmentations de capital réservées aux salariés en France - Employee Equity Issue:Evidence from France," Working Papers CREGO 1110603, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.
    15. Kato, Takao & Kauhanen, Antti, 2013. "Performance Pay and Enterprise Productivity: The Details Matter," ETLA Working Papers 21, The Research Institute of the Finnish Economy.

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