Do French firms use financial participation to transfer more risk to their workers?
AbstractSeveral papers report a positive effect of financial participation (profit-sharing, employee share ownership) on firms’ economic performance. This increase can be obtained in two main ways: by increasing the effort (extrinsic, intrinsic or commitment) of workers, directly or indirectly through worker selection; or by transferring more risk to the workers. The question is of course not neutral. Indeed if the risk transfer story is true then it means that the increase of economic performance is obtained at the expense of workers, who support more risks. The question is especially important in France where financial participation is associated with tax exemption for firms and where it is forbidden by law to substitute base wage and profit sharing. The purpose of our paper is to use three French data sets (an employer-employee data set- and two employer panel data sets), to answer the question of whether financial participation schemes are mainly designed as a risk transfer (from firms to workers) device.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne in its series Documents de recherche with number 12-10.
Length: 30 pages
Date of creation: Jun 2012
Date of revision:
Profit-sharing; ESOP; wage; risk sharing;
Find related papers by JEL classification:
- M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-CDM-2013-04-13 (Collective Decision-Making)
- NEP-HRM-2013-04-13 (Human Capital & Human Resource Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cooper, Russell, 1986. "Share contracts and macroeconomic externalities," Journal of Comparative Economics, Elsevier, vol. 10(4), pages 421-426, December.
- Sylvie Mabile, 1998. "Intéressement et salaires : complémentarité ou substitution ?," Économie et Statistique, Programme National Persée, vol. 316(1), pages 45-61.
- Sandra E. Black & Lisa M. Lynch, 2003.
"What's driving the new economy?: the benefits of workplace innovation,"
Working Paper Series
2003-23, Federal Reserve Bank of San Francisco.
- Sandra E. Black & Lisa M. Lynch, 2004. "What's driving the new economy?: the benefits of workplace innovation," Economic Journal, Royal Economic Society, vol. 114(493), pages F97-F116, 02.
- Sandra E. Black & Lisa M. Lynch, 2000. "What's Driving the New Economy: The Benefits of Workplace Innovation," NBER Working Papers 7479, National Bureau of Economic Research, Inc.
- Sandra E Black & Lisa M Lynch, 2002. "What's Driving the New Economy? The Benefits of Workplace Innovation," Working Papers 02-03, Center for Economic Studies, U.S. Census Bureau.
- Sandra E. Black & Lisa M. Lynch, 2001. "What's driving the new economy? The benefits of workplace innovation," Staff Reports 118, Federal Reserve Bank of New York.
- Andrew Pendleton & Andrew Robinson, 2010. "Employee Stock Ownership, Involvement, and Productivity: An Interaction-Based Approach," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 64(1), pages 3-29, October.
- Omar Azfar & Stephan Danninger, 2001. "Profit sharing, employment stability, and wage growth," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(3), pages 619-630, April.
- Bhargava, Sandeep, 1994. "Profit-Sharing and the Financial Performance of Companies: Evidence from U.K. Panel Data," Economic Journal, Royal Economic Society, vol. 104(426), pages 1044-56, September.
- Kraft, Kornelius & Ugarkovic, Marija, 2006. "Profit sharing and the financial performance of firms: Evidence from Germany," Economics Letters, Elsevier, vol. 92(3), pages 333-338, September.
- Wadhwani, Sushil & Wall, Martin, 1990.
"The Effects of Profit-Sharing on Employment, Wages, Stock Returns and Productivity: Evidence from UK Micro-data,"
Royal Economic Society, vol. 100(399), pages 1-17, March.
- Wadhwani, S. & Wall, M., 1988. "The Effects Of Profit-Sharing On Employment, Wages, Stock Returns And Productivity: Evidence From Uk Micro-Data," Papers 311, London School of Economics - Centre for Labour Economics.
- Cahuc, Pierre & Dormont, Brigitte, 1997.
"Profit-sharing: Does it increase productivity and employment? A theoretical model and empirical evidence on French micro data,"
Elsevier, vol. 4(3), pages 293-319, September.
- Cahuc, P. & Dormont, B., 1992. "Profit-Sharing: Does It Increase Productivity and Employment? A Theoretical Model and Empirical Evidence of French Micro Data," Papiers d'Economie MathÃÂ©matique et Applications 92.45, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Bell, Linda A & Neumark, David, 1993. "Lump-Sum Payments and Profit-Sharing Plans in the Union Sector of the United States Economy," Economic Journal, Royal Economic Society, vol. 103(418), pages 602-19, May.
- G.S. Maddala & Forrest D. Nelson, 1975. "Specification Errors in Limited Dependent Variable Models," NBER Working Papers 0096, National Bureau of Economic Research, Inc.
- Andrew M. Robinson & Nicholas Wilson, 2006. "Employee Financial Participation and Productivity: An Empirical Reappraisal," British Journal of Industrial Relations, London School of Economics, vol. 44(1), pages 31-50, 03.
- Juin-Jen Chang, 2006. "Profit Sharing, Risk Sharing, and Firm Size: Implications of Efficiency Wages," Small Business Economics, Springer, vol. 27(2), pages 261-273, October.
- Lee, Lung-Fei & Trost, Robert P., 1978. "Estimation of some limited dependent variable models with application to housing demand," Journal of Econometrics, Elsevier, vol. 8(3), pages 357-382, December.
- Addison, John T & Belfield, Clive R, 2000. "The Impact of Financial Participation and Employee Involvement on Financial Performance: A Re-estimation Using the 1998 WERS," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(5), pages 571-83, November.
- repec:nbr:nberwo:14230 is not listed on IDEAS
- Sarah Brown & Fathi Fakhfakh & John G. Sessions, 1999. "Absenteeism and profit sharing: An empirical analysis based on French panel data, 1981û1991," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(2), pages 234-251, January.
- McNabb, Robert & Whitfield, Keith, 1998. "The Impact of Financial Participation and Employee Involvement on Financial Performance," Scottish Journal of Political Economy, Scottish Economic Society, vol. 45(2), pages 171-87, May.
- Chris Doucouliagos, 1995. "Worker participation and productivity in labor-managed and participatory capitalist firms: A meta-analysis," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(1), pages 58-77, October.
- repec:nbr:nberwo:14233 is not listed on IDEAS
- Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
- Ichino, Andrea, 1994. "Flexible labor compensation, risk sharing and company leverage," European Economic Review, Elsevier, vol. 38(7), pages 1411-1421, August.
- FitzRoy, Felix R & Kraft, Korenelius, 1987. "Cooperation, Productivity, and Profit Sharing," The Quarterly Journal of Economics, MIT Press, vol. 102(1), pages 23-35, February.
- Noélie Delahaie & Richard Duhautois, 2013. "L'impact des dispositifs collectifs de partage des bénéfices sur les rémunérations en France. Une analyse empirique sur la période 1999-2007," Working Papers halshs-00967479, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Samuel Nosel).
If references are entirely missing, you can add them using this form.