Determinants of Profit Sharing in the Finnish Sector
AbstractThis study investigates the role of factors that determine individual employee’s and firms participation in profit sharing schemes. Using a large panel data of Finnish employees for the period 1996-2000 we analyse individual and workplace characteristics that make firms employ profit sharing schemes and workers susceptible of receiving profit sharing bonuses. In particular two links between profit sharing schemes and workers performance have been analysed. First, in looking at profit sharing as an incentive device the results show a positive link between firm size and monitoring costs. Second, we find that younger individuals with higher mean salary and capacity to bear risk are more susceptible to profit sharing schemes. The industrial sector in which the individual is employed is also an important determinant factor. We find weak evidence of a relationship between performance of firms and employment of profit sharing schemes at the industrial sector level.
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Bibliographic InfoPaper provided by Hanken School of Economics in its series Working Papers with number 492.
Length: 32 pages
Date of creation: 27 Nov 2003
Date of revision:
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Postal: Hanken School of Economics, Arkadiankatu 22, P.O.B. 479; FIN 00101 Helsinki, Finland
Phone: +358-9-431 331
Fax: +358-9-431 33 333
Web page: http://www.hanken.fi
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individual; firm; profit sharing; panel data;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-30 (All new papers)
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