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Employee Financial Participation and Productivity: An Empirical Reappraisal

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  • Andrew M. Robinson
  • Nicholas Wilson

Abstract

Avner Ben-Ner and Derek Jones cast doubt on the notion of a simple causal link between financial participation (FP) and productivity, and consequently on the validity of much of the empirical literature that has sought to quantify this relationship. This paper is an attempt to investigate this proposition. Our empirical reappraisal revealed that the route through which employee share ownership and profit-sharing schemes achieve these gains is quite separate and more involved than either the theory or prior empirical research suggests. This is particularly evident by extending the complementarities thesis beyond purely participatory bundles to embrace firm-specific and organizational variables. Our analysis also addressed recent calls to aid the interpretation of the observed effects of FP by creating a link between the use and operation of FP and its impact on productivity. Copyright Blackwell Publishing Ltd/London School of Economics 2006.

Suggested Citation

  • 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, March.
  • Handle: RePEc:bla:brjirl:v:44:y:2006:i:1:p:31-50
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    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-8543.2006.00486.x
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    Cited by:

    1. Mirella Damiani & Andrea Ricci, 2011. "Decentralised bargaining and performance related pay: new evidence from a panel of Italian firms," Quaderni del Dipartimento di Economia, Finanza e Statistica 97/2011, Università di Perugia, Dipartimento Economia.
    2. Joseph R. Blasi & Richard B. Freeman & Christopher Mackin & Douglas L. Kruse, 2010. "Creating a Bigger Pie? The Effects of Employee Ownership, Profit Sharing, and Stock Options on Workplace Performance," NBER Chapters,in: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options, pages 139-165 National Bureau of Economic Research, Inc.
    3. Noélie Delahaie & Richard Duhautois, 2015. "Profit-Sharing and Wages: An Empirical Analysis Using French Data Between 2000 and 2007," Working Papers halshs-01143491, HAL.
    4. Leila Baghdadi & Rihab Bellakhal & Marc-Arthur Diaye, 2016. "Financial Participation: Does the Risk Transfer Story Hold in France?," British Journal of Industrial Relations, London School of Economics, vol. 54(1), pages 3-29, March.
    5. Artz, Georgeanne M. & Kim, Younjun, 2011. "Business Ownership by Workers: Are Worker Cooperatives a Viable Option?," Staff General Research Papers Archive 34575, Iowa State University, Department of Economics.
    6. Leila Baghdadi & Rihab Bellakhal & Marc-Arthur Diaye, 2012. "Do French firms use financial participation to transfer more risk to their workers?," Documents de recherche 12-10, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    7. Heywood, John S. & Jirjahn, Uwe, 2009. "Profit sharing and firm size: The role of team production," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 246-258, August.
    8. Geert Braam & Erik Poutsma, 2015. "Broad-Based Financial Participation Plans and Their Impact on Financial Performance: Evidence from a Dutch Longitudinal Panel," De Economist, Springer, vol. 163(2), pages 177-202, June.
    9. Tony Fang, 2016. "Profit sharing: Consequences for workers," IZA World of Labor, Institute for the Study of Labor (IZA), pages 225-225, January.
    10. Kim, Kyoung Yong & Patel, Pankaj C., 2017. "Employee ownership and firm performance: A variance decomposition analysis of European firms," Journal of Business Research, Elsevier, vol. 70(C), pages 248-254.
    11. Long, Richard J. & Fang, Tony, 2013. "Profit Sharing and Workplace Productivity: Does Teamwork Play a Role?," IZA Discussion Papers 7869, Institute for the Study of Labor (IZA).
    12. Gilberto Tadeu Lima & Jaylson Jair da Silveira, 2018. "Macrodynamic Implications of Employee Profit Sharing as Effort Elicitation Device," Working Papers, Department of Economics 2018_02, University of São Paulo (FEA-USP).
    13. Doucouliagos, Chris & Laroche, Patrice & Kruse, Douglas L. & Stanley, T. D., 2018. "Where Does Profit Sharing Work Best? A Meta-Analysis on the Role of Unions, Culture, and Values," IZA Discussion Papers 11617, Institute for the Study of Labor (IZA).

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