Arbeitspapier
Does Employee Stock Ownership Work? Evidence from Publicly-Traded Firms in Japan
This paper provides novel evidence on the effects of employee stock ownership (ESO), a prominent example of shared capitalism. In so doing, we take advantage of our access to new panel data on Japanese ESO plans for a highly representative sample of publicly-traded firms in Japan (covering more than 75% of all firms listed on Tokyo Stock Exchange) over 1989-2013. Unlike most prior studies, we focus on the effects of changes in varying attributes of existing ESO – the effects on the intensive margin. Our fixed effect estimates show that an increase in the strength of the existing ESO plans measured by stake per employee results in statistically significant productivity gains. Furthermore, such productivity gains are found to lead to profitability gains since wage gains from ESO plans are statistically significant yet rather modest. Our analysis of Tobin's Q suggests that the market tends to view such gains from ESO plans as permanent. We further find that increasing the stake of the existing core participants is more effective in boosting gains from ESO plans than bringing in more employees into the trust. We use unique instruments (the peer firm's matching grant rate and abnormal return) to account for possible endogeneity of our ESO variables, and show that the estimated positive gains from ESO plans are not biased upward and likely to be lower bounds. We also find evidence for complementarity between ESO plans aimed at incentivizing non-executive employees and stock option aimed at incentivizing executives. Finally the positive effects on productivity, profitability, wages and Tobin's Q are found to be larger when the proportion of powerful institutional investors and foreign investors are greater; and smaller for larger firms that are more subject to the free-rider problem.
- Sprache
-
Englisch
- Erschienen in
-
Series: IZA Discussion Papers ; No. 11671
- Klassifikation
-
Wirtschaft
Producer Cooperatives; Labor Managed Firms; Employee Ownership
Personnel Economics: Compensation and Compensation Methods and Their Effects
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- Thema
-
employee stock ownership
shared capitalism
group incentive
productivity
Tobin's Q
managerial entrenchment
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Kato, Takao
Miyajima, Hideaki
Owan, Hideo
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute of Labor Economics (IZA)
- (wo)
-
Bonn
- (wann)
-
2018
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Kato, Takao
- Miyajima, Hideaki
- Owan, Hideo
- Institute of Labor Economics (IZA)
Entstanden
- 2018
Ähnliche Objekte (12)
Essays on corporate social responsibility in large, publicly traded firms
The Impact of Skilled Foreign Workers on Firms: an Investigation of Publicly Traded U.S. Firms
The Impact of Skilled Foreign Workers on Firms: An Investigation of Publicly Traded U.S. Firms
Control Preference and Financial Attributes: Founders as CEOs in Small, Publicly Traded Firms
Corporate governance provisions, family involvement, and firm performance in publicly traded family firms
The Performance of Publicly Traded European Venture Capital Companies
Employee Stock Ownership
Changes in the composition of publicly traded firms: Implications for the dividend-price ratio and return predictability
Sharing ownership via employee stock ownership
Essays on Employee Ownership
Ownership and scope in German publicly listed corporations
Employee stock ownership and employee performance: Why does ownership affect individual performance?
Essays on corporate social responsibility in large, publicly traded firms
The Impact of Skilled Foreign Workers on Firms: an Investigation of Publicly Traded U.S. Firms
The Impact of Skilled Foreign Workers on Firms: An Investigation of Publicly Traded U.S. Firms
Control Preference and Financial Attributes: Founders as CEOs in Small, Publicly Traded Firms
Corporate governance provisions, family involvement, and firm performance in publicly traded family firms
The Performance of Publicly Traded European Venture Capital Companies
Employee Stock Ownership
Changes in the composition of publicly traded firms: Implications for the dividend-price ratio and return predictability
Sharing ownership via employee stock ownership
Essays on Employee Ownership
Ownership and scope in German publicly listed corporations
Employee stock ownership and employee performance: Why does ownership affect individual performance?
Essays on corporate social responsibility in large, publicly traded firms
The Impact of Skilled Foreign Workers on Firms: an Investigation of Publicly Traded U.S. Firms
The Impact of Skilled Foreign Workers on Firms: An Investigation of Publicly Traded U.S. Firms
Control Preference and Financial Attributes: Founders as CEOs in Small, Publicly Traded Firms
Corporate governance provisions, family involvement, and firm performance in publicly traded family firms
The Performance of Publicly Traded European Venture Capital Companies
Employee Stock Ownership
Changes in the composition of publicly traded firms: Implications for the dividend-price ratio and return predictability
Sharing ownership via employee stock ownership
Essays on Employee Ownership
Ownership and scope in German publicly listed corporations