The determinants of employee stock ownership: French case

Dalenda Ben Ahmed,Zouhaira Khelil-Rhouma

doi:10.22495/cocv17i4art9

Dalenda Ben Ahmed, Zouhaira Khelil-Rhouma

Open Access

https://doi.org/10.22495/cocv17i4art9

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Abstract

The present study scrutinizes the factors affecting the practice of employee stock ownership. This work sheds light on the role and contribution of this practice to enhance the corporate governance systems. Our study uses a sample of 216 listed French companies in 2010. The empirical approach is a linear regression used to examine the relation between the dependent variable and the independent variables. The results show that the large companies are the most likely to practice the ESO and this is developed by a reduction in debt, the dividend distribution, and the tax rate. The focal point of this work is to go beyond the simple scope of the existence of the employee stock ownership and is interested in the conditions of its development in the French companies.

Highlights

The employee stock ownership (ESO) has become a world phenomenon, which has witnessed unprecedented development in contemporary capitalism to the extent that it seems to be a prerequisite in the growth regimes of the main developed countries (Aglietta & Reberioux, 2005)
The results show that the large companies are the most likely to practice the ESO and this is developed by a reduction in debt, the dividend distribution, and the tax rate
This study examines the determinants of the presence and development of employee stock ownership practices in French companies

Summary

Introduction

The employee stock ownership (ESO) has become a world phenomenon, which has witnessed unprecedented development in contemporary capitalism to the extent that it seems to be a prerequisite in the growth regimes of the main developed countries (Aglietta & Reberioux, 2005). The ESO is a crucial mechanism in solving the interest conflicts that may arise between the shareholders, the managers, and even the employees. The practice of employee share ownership was the subject of a behavioral study of employee-shareholders. What are the factors that encourage companies to use the practice of ESO? The first one is a theoretical study that explains the importance of using employee stock ownership and, with reference to the literature, we will present the determinants of the employee stock ownership and identify the research hypotheses. Thereafter, we will evaluate the intensity of the incentive factors affecting the practice of employee stock ownership in the French companies. Through the use of the test of Granger, we will study the causal link between the different selected variables

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