<abstract xmlns="http://www.w3.org/1999/xhtml"> Background and purpose: Kelso’s quest to identify the economic counterpart of political democracy and, as a corollary, his concern about the nature of the economic system’s organisation needed to support the institutions of a politically free society, contributed two important terms: economic power and democracy. Following Kelso’s reasoning, my research study aims to understand the determinants of the implementation of economic democracy, measured by the incidence of employee share ownership plans, within European Union countries.Methodology: Setting out with the theory of one of the founding fathers of employee stock ownership plans, I perform a cross-country analysis spanning five years (2008-2012) to explain the incidence level of employee ownership by independent variables operationalizing the political, legal, socio-educational and economic structures of twenty European Union countries. Using secondary data from the European Federation of Employee Share Ownership, I explain the determinants’ pertinence, while accounting for severe data limitations.Results: I report a strong correlation between employee ownership incidence and the index of economic freedom. However, the labour market’s freedom, the trustworthiness of and confidence in financial markets and the quality of secondary and tertiary education do not deliver clear-cut results.Conclusion: Further research should comprehensively scrutinise country-specific factors regarding corporate governance issues and cross-cultural controls. Employee ownership researchers should consider this field of research to understand why countries that are so-called employee ownership champions are experiencing widening income inequality.</abstract>

Background and purpose: Kelso’s quest to identify the economic counterpart of political democracy and, as a corollary, his concern about the nature of the economic system’s organisation needed to support the institutions of a politically free society, contributed two important terms: economic power and democracy. Following Kelso’s reasoning, my research study aims to understand the determinants of the implementation of economic democracy, measured by the incidence of employee share ownership plans, within European Union countries.Methodology: Setting out with the theory of one of the founding fathers of employee stock ownership plans, I perform a cross-country analysis spanning five years (2008-2012) to explain the incidence level of employee ownership by independent variables operationalizing the political, legal, socio-educational and economic structures of twenty European Union countries. Using secondary data from the European Federation of Employee Share Ownership, I explain the determinants’ pertinence, while accounting for severe data limitations.Results: I report a strong correlation between employee ownership incidence and the index of economic freedom. However, the labour market’s freedom, the trustworthiness of and confidence in financial markets and the quality of secondary and tertiary education do not deliver clear-cut results.Conclusion: Further research should comprehensively scrutinise country-specific factors regarding corporate governance issues and cross-cultural controls. Employee ownership researchers should consider this field of research to understand why countries that are so-called employee ownership champions are experiencing widening income inequality.

The Determinants of Employee Ownership Plan Implementation in EU Countries – the Quest for Economic Democracy: a First Look at the Evidence

Porto Polytechnic, School of Management and Industrial Studies (ESEIG), Vila do Conde, Portugal

Organizacija

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Background and purpose: Kelso’s quest to identify the economic counterpart of political democracy and, as a corollary, his concern about the nature of the...

The Determinants of Employee Ownership Plan Implementation in EU Countries – the Quest for Economic Democracy: a First Look at the Evidence

Published Online: Jun 10, 2016

Page range: 94 - 107

Received: Aug 07, 2015

Accepted: Apr 22, 2016

DOI: https://doi.org/10.1515/orga-2016-0007

Keywords
employee ownership, economic democracy, free markets, economic freedom, equity markets

© by Ricardo B. Machado

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The Determinants of Employee Ownership Plan Implementation in EU Countries – the Quest for Economic Democracy: a First Look at the Evidence

Published Online: Jun 10, 2016

Page range: 94 - 107

Received: Aug 07, 2015

Accepted: Apr 22, 2016

DOI: https://doi.org/10.1515/orga-2016-0007

Keywordsemployee ownership, economic democracy, free markets, economic freedom, equity markets

© by Ricardo B. Machado

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
employee ownership, economic democracy, free markets, economic freedom, equity markets