Bank Employee Incentives and Stock Purchase Plans Participation
We investigate which factors influence 44,649 employees' decision to invest in a top retail banking group in France. We have two objectives: (i) to explore factors associated with the amount invested in the plan, and (ii) to explore whether these factors have same associations with the probability of investing more than the incentive pay i.e. being an active investor. Specifically, we focus on four parameters that have been shown to affect participation: liquidity constraints, imperfect knowledge of the plan, asset choice, and transaction costs. We confirm Engelhardt and Madrian (Natl Tax J 57:385–406, 2004) assumptions according to which such factors contribute to explain non-participation. We show that ESPP contributors have very specific and unobserved motivations, as shown with the positive correlations between error terms in the two steps of investment decisions. The existence of unobservable investment motives can be explained by a lower risk aversion, a higher time preference, or a strong willingness to participate to corporate governance.
(This abstract was borrowed from another version of this item.)
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 40 (2011)
Issue (Month): 3 (December)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/journal/10693|
References listed on IDEAS
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.:
- Richard H. Thaler & Shlomo Benartzi, 2004. "Save More Tomorrow (TM): Using Behavioral Economics to Increase Employee Saving," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 164-187, February.
- Gale, William G & Scholz, John Karl, 1994.
"IRAs and Household Saving,"
American Economic Review,
American Economic Association, vol. 84(5), pages 1233-1260, December.
- Gale, W.G. & Scholz, J.K., 1990. "Ira'S And Households Saving," Papers 16, California Los Angeles - Applied Econometrics.
- Gale, W.G. & scholz, J.K., 1992. "IRAS and Household Saving," Papers 9244, Tilburg - Center for Economic Research.
- Gale, W.G. & Scholz, J.K., 1990. "Iras And Household Savings," Working papers 9009, Wisconsin Madison - Social Systems.
- 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.
- Nicolas Aubert & Thomas Rapp, 2008. "Les Salariés Actionnaires : Pourquoi Investissent-ils dans leur Entreprise ?," Post-Print halshs-00454019, HAL.
- Thaler, Richard H & Shefrin, H M, 1981. "An Economic Theory of Self-Control," Journal of Political Economy, University of Chicago Press, vol. 89(2), pages 392-406, April.
- H. M. Shefrin & Richard Thaler, 1977. "An Economic Theory of Self-Control," NBER Working Papers 0208, National Bureau of Economic Research, Inc.
- Degeorge, Francois & Jenter, Dirk & Moel, Alberto & Tufano, Peter, 2004. "Selling company shares to reluctant employees: France Telecom's experience," Journal of Financial Economics, Elsevier, vol. 71(1), pages 169-202, January.
- Luc Arrondel & André Masson, 2007. "Inégalités patrimoniales et choix individuels : des goûts et des richesses," Post-Print halshs-00754857, HAL.
- Nicolas Aubert & Thomas Rapp, 2010. "Employee's investment behaviors in a company based savings plan," Finance, Presses universitaires de Grenoble, vol. 31(1), pages 5-32.
- Nicolas Aubert & Thomas Rapp, 2010. "Employees' investment behaviors in a company based savings plan," Post-Print halshs-00454018, HAL.
- Benartzi, Shlomo & Thaler, Richard H & Utkus, Stephen P & Sunstein, Cass R, 2007. "The Law and Economics of Company Stock in 401(k) Plans," Journal of Law and Economics, University of Chicago Press, vol. 50(1), pages 45-79, February.
- Brigitte C. Madrian & Dennis F. Shea, 2001. "The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1149-1187.
- Brigitte C. Madrian & Dennis F. Shea, 2000. "The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior," NBER Working Papers 7682, National Bureau of Economic Research, Inc.
- Hausman, Jerry A & Poterba, James M, 1987. "Household Behavior and the Tax Reform Act of 1986," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 101-119, Summer.
- Jerry A. Hausman & James M. Poterba, 1986. "Household Behavior and the Tax Reform Act of 1986," Working papers 437, Massachusetts Institute of Technology (MIT), Department of Economics.
- Jerry A. Hausman & James M. Poterba, 1987. "Household Behavior and the Tax Reform Act of 1986," NBER Working Papers 2120, National Bureau of Economic Research, Inc.
- Gur Huberman & Sheena Iyengar & Wei Jiang, 2007. "Defined Contribution Pension Plans: Determinants of Participation and Contributions Rates," Journal of Financial Services Research, Springer;Western Finance Association, vol. 31(1), pages 1-32, February.
- Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
- Engelhardt, Gary V. & Madrian, Brigitte C., 2004. "Employee Stock Purchase Plans," National Tax Journal, National Tax Association, vol. 57(2), pages 385-406, June.
- Gary V. Engelhardt & Brigitte C. Madrian, 2004. "Employee Stock Purchase Plans," NBER Working Papers 10421, National Bureau of Economic Research, Inc.
- Tullio Jappelli & Marco Pagano, 1994. "Saving, Growth, and Liquidity Constraints," The Quarterly Journal of Economics, Oxford University Press, vol. 109(1), pages 83-109.
- Jappelli, Tullio & Pagano, Marco, 1992. "Saving, Growth and Liquidity Constraints," CEPR Discussion Papers 662, C.E.P.R. Discussion Papers.
- Tullio Jappelli, 1990. "Who is Credit Constrained in the U. S. Economy?," The Quarterly Journal of Economics, Oxford University Press, vol. 105(1), pages 219-234. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:kap:jfsres:v:40:y:2011:i:3:p:185-203. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.