The impact of employee stock ownership on firms' investments and market value

Andrew H. Chen; John W. Kensinger; R. D. Terrell

doi:10.1504/IJSTM.2007.013921

The impact of employee stock ownership on firms' investments and market value

Andrew H. Chen
, John W. Kensinger
, R. D. Terrell^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract

Although, employee stock ownership may result in increased cash flows due to enhanced organisational productivity or improved governance, this benefit is counter-balanced by the increased risk premium due to a higher correlation between the returns to the firm and the returns to human capital in general. The analysis in this paper provides a framework for optimising employee incentives from stock ownership.

Original language	English
Pages (from-to)	293-315
Number of pages	23
Journal	International Journal of Services, Technology and Management
Volume	8
Issue number	4-5
DOIs	https://doi.org/10.1504/IJSTM.2007.013921
Publication status	Published - 2007

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10.1504/IJSTM.2007.013921

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title = "The impact of employee stock ownership on firms' investments and market value",

abstract = "Although, employee stock ownership may result in increased cash flows due to enhanced organisational productivity or improved governance, this benefit is counter-balanced by the increased risk premium due to a higher correlation between the returns to the firm and the returns to human capital in general. The analysis in this paper provides a framework for optimising employee incentives from stock ownership.",

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AB - Although, employee stock ownership may result in increased cash flows due to enhanced organisational productivity or improved governance, this benefit is counter-balanced by the increased risk premium due to a higher correlation between the returns to the firm and the returns to human capital in general. The analysis in this paper provides a framework for optimising employee incentives from stock ownership.

KW - Employee stock ownership

KW - Firms' investments

KW - Market value

UR - https://www.scopus.com/pages/publications/34547244653

U2 - 10.1504/IJSTM.2007.013921

DO - 10.1504/IJSTM.2007.013921

M3 - Article

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EP - 315

JO - International Journal of Services, Technology and Management

JF - International Journal of Services, Technology and Management

IS - 4-5

ER -

The impact of employee stock ownership on firms' investments and market value

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