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Do investments in human capital lead to employee share ownership? Evidence from French establishments

Author

Listed:
  • Loris Guery

    (University of Lorraine, France)

  • Andrew Pendleton

    (Durham University Business School, UK)

Abstract

Investments in human capital can create a hold-up problem whereby both employers and employees exploit the bargaining weaknesses of the other. Employee share ownership (ESO) can mitigate this hold-up problem because it can align interests, develop loyalty, signal good-will and lock in employees. Previous studies have shown positive relationships between company investments in human capital and the use of ESO consistent with this argument but have been unable to identify the direction of causality. Using panel data from the French REPONSE survey, the findings indicate that significant and continuous investments in human capital take place prior to the implementation of ESO.

Suggested Citation

  • Loris Guery & Andrew Pendleton, 2016. "Do investments in human capital lead to employee share ownership? Evidence from French establishments," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 37(3), pages 567-591, August.
    • Handle: RePEc:sae:ecoind:v:37:y:2016:i:3:p:567-591
    DOI: 10.1177/0143831X14551999
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    References listed on IDEAS

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    Cited by:

    1. Benjamin Faigen & Niels Mygind & Throstur Olaf Sigurjonsson & Audur Arna Arnardottir, 2021. "Three dimensions of employees acquiring shares in their firms: Personal characteristics, motives and type of ownership," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 42(3), pages 737-765, August.
    2. Juliette Summers & Shiona Chillas, 2021. "Working in employee-owned companies: The role of economic democracy skills," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 42(4), pages 1029-1051, November.

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