Firm Survival and Performance in Privately Held ESOP Companies

Blasi, Joseph R.; Kruse, Douglas; Weltmann, Dan

doi:10.1108/s0885-3339(2013)0000014006

Cited by 22 publications

(20 citation statements)

References 13 publications

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“…() found that public firms with substantial EO stakes in 1988 had greater employment stability through 2001 than their closely matched pairs, and Blasi et al . () found that closely held companies with ESOPs had greater stability over the 1988–2001 period than closely matched non‐ESOP firms.…”

Section: Previous Literature On Eo and Employment Stabilitymentioning

confidence: 99%

An Empirical Analysis of the Relationship between Employee Ownership and Employment Stability in the US: 1999–2011

Kurtulus¹,

Kruse²

2017

Brit J Industrial Rel

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Do firms with employee ownership (EO) programs exhibit greater employment stability in the face of economic downturns? In particular, are firms with EO programs less likely to lay off workers during negative shocks? In this article, we examine the relationship between EO programs and employment stability in the United States using longitudinal Form 5500‐CompuStat matched data on the universe of publicly traded companies during 1999–2011. We examine how firms with EO programs weathered the recessions of 2001 and 2008 in terms of employment stability relative to firms without EO programs, and also whether such firms were less likely to lay off workers when faced with negative shocks more broadly. In our econometric analyses, we use a rich array of measures of EO at firms, including the presence of EO stock in pension plans, the presence of employee stock ownership plans (ESOPs), the value of EO stock per employee, the share of the firm owned by employees, the share of workers at the firm participating in EO and the share of workers at the firm participating in ESOPs. We also consider both economy‐wide negative shock measures (increases in the unemployment rate, declines in the employment‐to‐population ratio) and firm‐specific negative shock measures (declines in firm sales, declines in firm stock price). Our results indicate that EO firms exhibit greater employment stability in the face of economy‐wide and firm‐specific negative shocks.

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Section: Previous Literature On Eo and Employment Stabilitymentioning

confidence: 99%

An Empirical Analysis of the Relationship between Employee Ownership and Employment Stability in the US: 1999–2011

Kurtulus¹,

Kruse²

2017

Brit J Industrial Rel

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“…Supporting the preference for stability and efficiency, employee ownership increases firm survival (e.g. Blasi et al, 2013;Estrin and Jones, 1992;Iqbal and Hamid, 2000), productivity (Kumbhakar and Dunbar, 1993;Mitchell et al, 1990;Park and Song, 1995) and organisational stability (Kruse, 2002;Kurtulus et al, 2011). Furthermore, increasing employee ownership diminishes the focus on growth through reduced R&D investment and commitment to innovation (Gamble, 2000) and leads to a decreased focus on maximising value and greater preference for lowering risk (Faleye et al, 2006).…”

Section: Employee Ownership and Performance Outcomesmentioning

confidence: 99%

Employee ownership and firm performance: a meta‐analysis

O’Boyle

Patel

Gonzalez‐Mulé

2016

Human Res Mgmt Journal

105

115

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Employee ownership has been an area of significant practitioner and academic interest for the past four decades. Yet, empirical results on the relationship between employee ownership and firm performance remain mixed. To aggregate findings and provide potential direction for future theoretical development, we conducted a meta‐analysis of 102 samples representing 56,984 firms. Employee ownership has a small, but positive and statistically significant relation to firm performance ( truer¯ = 0.04). The effect is generally positive for studies with different sampling designs (samples assessing change in performance pre‐employee–post‐employee ownership adoption or samples on firms with employee ownership), different performance operationalisation (efficiency or growth) and firm type (publicly held or privately held). Suggesting benefits of employee ownership in a variety of contexts, we found no differences in effects on performance in publicly held versus privately held firms, stock or stock option‐based ownership plans or differences in effects across different firm sizes (i.e. number of employees). We do find that the effect of employee ownership on performance has increased in studies over time and that studies with samples from outside the USA report stronger effects than those within. We also find little to no evidence of publication bias.

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“…Employee ownership has been found to make a significant impact on firm performance (Blasi et al . , ). For example, in a recent meta‐analysis on employee ownership, O'Boyle et al .…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Broad‐Based Employee Ownership and Labour Productivity During the 2008 Recession: Evidence from Public Firms in Europe

Kim

Patel

2019

Brit J Industrial Rel

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Did publicly traded European firms with employee ownership (EO) realize higher firm performance during or after the Great Recession? Contributing to the growing interest in exploring the association between EO and firm performance during and after the 2008 economic crisis, we draw on a longitudinal sample of 4,259 firm-years representing 892 publicly traded firms from 28 European countries. The results show that compared to firms without EO, those with EO experienced higher firm performance during or after the recession, albeit with small effect size. Consistent with past findings, we found that firms with EO were less likely to lower their employee count during or after the recession. Findings are robust to controlling for contemporaneous endogeneity and alternate specifications. Our results indicate that publicly traded European firms with EO, on average, realized higher firm performance in the face of the Great Recession.

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Firm Survival and Performance in Privately Held ESOP Companies

Cited by 22 publications

References 13 publications

An Empirical Analysis of the Relationship between Employee Ownership and Employment Stability in the US: 1999–2011

An Empirical Analysis of the Relationship between Employee Ownership and Employment Stability in the US: 1999–2011

Employee ownership and firm performance: a meta‐analysis

Broad‐Based Employee Ownership and Labour Productivity During the 2008 Recession: Evidence from Public Firms in Europe

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