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Employee ownership and participation effects on outcomes in firms majority employee-owned through employee stock ownership plans in the US1

Author

Listed:
  • Brent Kramer

    (City University of New York, USA, bhkramer@aol.com)

Abstract

This article compares sales per employee for a panel of over 300 US firms which are majority employee-owned through employee stock ownership plans with a panel of closely matched, traditionally owned firms. Responses from a survey of firm work practices are used to estimate worker participation effects. Comparing matched firms, sales per employee are substantially and significantly higher for the employee-owned group of firms. This ‘employee-owned advantage’ is significantly greater among smaller firms, and (holding firm size constant) improves as the average employee’s ownership stake in firm stock goes up. Holding both firm size and employee stake constant, the employee-owned advantage is substantially (though not significantly) greater in the large group of firms which are 100 percent owned by their ESOP trusts. Holding firm size constant, increased production—worker influence on three facets of firm innovation also improves the advantage.

Suggested Citation

  • Brent Kramer, 2010. "Employee ownership and participation effects on outcomes in firms majority employee-owned through employee stock ownership plans in the US1," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 31(4), pages 449-476, November.
    • Handle: RePEc:sae:ecoind:v:31:y:2010:i:4:p:449-476
    DOI: 10.1177/0143831X10365574
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    References listed on IDEAS

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    1. Gorm Winther, 1999. "Theory O-Is the Case Closed?," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 20(2), pages 269-293, May.
    2. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
    3. Chris Doucouliagos, 1995. "Worker Participation and Productivity in Labor-Managed and Participatory Capitalist Firms: A Meta-Analysis," ILR Review, Cornell University, ILR School, vol. 49(1), pages 58-77, October.
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    Cited by:

    1. Cooper, Dylan A. & Fang, Tony & Wan, Vincent, 2025. "Employee Ownership and Promotive Voice: The Roles of Psychological Ownership and Perceived Alignment of Interests," IZA Discussion Papers 18023, IZA Network @ LISER.
    2. Simon S Torp, 2016. "The prevalence and antecedents of employee stock ownership in Denmark," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 37(1), pages 119-144, February.

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