Employee ownership: does firm's size matter ?
A theoretical model is considered in a monopoly setting, where the production cost of the firm depends on the efforts of employees who may receive a positive part of the capital if the shareholders find profitable to do so. We specify the condition under which at Nash equilibrium the firm distributes a positive part of its capital to employees, and analyze the effects of this employee ownership strategy on social welfare. We show that the conditions under which shareholders attribute a positive share of capital to employees, is related jointly to the firm’s size and effort disutility, which makes the novelty of our paper relative to the previous papers considering the firm’s size alone. This joint role is tested empirically, using a French data base “REPONSE 2004-2005”. Our paper may allow to explain why in the empirical literature there is no consensus regarding the relationship between firm’s size and employee ownership implementation.
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- Georges Dionne & Benoit Dostie, 2007.
"New Evidence on the Determinants of Absenteeism Using Linked Employer-Employee Data,"
Cornell University, ILR School, vol. 61(1), pages 108-120, October.
- Georges Dionne & Benoit Dostie, 2005. "New Evidence on the Determinants of Absenteeism Using Linked Employer-Employee Data," Cahiers de recherche 0521, CIRPEE.
- Georges Dionne & Benoit Dostie, 2005. "New Evidence on the Determinants of Absenteeism Using Linked Employer-Employee Data," Cahiers de recherche 05-04, HEC Montréal, Institut d'économie appliquée.
- Sarah Brown & Fathi Fakhfakh & John G. Sessions, 1999. "Absenteeism and Employee Sharing: An Empirical Analysis Based on French Panel Data, 1981â€“1991," ILR Review, Cornell University, ILR School, vol. 52(2), pages 234-251, January.
- Allen, Steven G, 1981. "An Empirical Model of Work Attendance," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 77-87, February.
- Cahuc, Pierre & Dormont, Brigitte, 1997. "Profit-sharing: Does it increase productivity and employment? A theoretical model and empirical evidence on French micro data," Labour Economics, Elsevier, vol. 4(3), pages 293-319, September.
- Cahuc, P. & Dormont, B., 1992. "Profit-Sharing: Does It Increase Productivity and Employment? A Theoretical Model and Empirical Evidence of French Micro Data," Papiers d'Economie MathÃ©matique et Applications 92.45, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
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