The effects of employee stock ownership on stock liquidity: Evidence from the Korean market

This study investigates the relationship between the level of employee stock ownership (ESO) and stock liquidity. Using Korean ESO data, we find that ESO is positively associated with various liquidity measures. Stock-owning employees tend to mitigate information asymmetry to increase their benefits from the transparent market. We also find stronger effects when the firm is not an affiliate of a chaebol family group, and is less monitored by financial analysts, foreign investors, and outside directors. Furthermore, we employ various robustness tests to mitigate potential endogeneity concerns.     

Equity block transfers in transition economies: Evidence from Poland

This paper investigates valuation effects of share block transfers and employs agency theory to explain the determinants of equity block premia. A sample of transactions from Poland is used to measure benefits and costs of ownership concentration. Block premia are found to be remarkably low and comparable with those for the most developed economies. Shareholders expect to benefit from intensified monitoring and from corporate restructuring resulting from block acquisitions. Still, shareholders are wary of expropriation stemming from the extraction of private benefits of control by block holders. The opportunities to extract such benefits depend on relative power of investors.     

The impact of large-scale employee share ownership plans on labour productivity: the case of Eircom

Large-scale employee share ownership plans (ESOPs) have been a distinctive characteristic of Irish public enterprise reform, with shareholdings of 14.9% being allocated to employees as part of firm restructuring and privatisation programmes. This paper presents a case study analysis of a large-scale ESOP in Eircom, Ireland's former national telecommunications operator. We identify changes in labour productivity (LP) during 8 years before and after the establishment of the company's ESOP and use a framework based on Pierce, Rubenfeld and Morgan (1991, The Academy of Management Review, 16, 121–144) and Pierce, Kostova and Dirks (2001, Academy of Management Review, 26, 298–310) to explore the role played by the ESOP. The ESOP was found to play a key role in enabling firm-level reform through concession bargaining and changes in employee relations, and thereby indirectly affecting LP. However, despite the substantial shareholding and influence of the ESOP, we find that it has failed to create a sense of psychological ownership among employees, and thereby further impact on productivity.     

Valuation effects of capital inflows: Evidence from emerging market economies

This paper studies valuation changes of capital inflows in 19 emerging market economies (EMEs). In most of the EMEs, we find that there are significant valuation changes and a positive rate of return on external liabilities by foreigners. Furthermore, the nonlinear effects of exchange rate movements on valuation changes are investigated using panel smooth transition regression models. Empirical results show that the transition is centered at approximately −22.3% of exchange rate change, which implies that when the exchange rate appreciates more than this level, foreign investment value gains increase considerably.     

Dynamic and non-neutral productivity effects of foreign ownership: A nonparametric approach

This paper studies two novel productivity characteristics of foreign acquisition on high-tech manufacturing firms: the dynamic and the non-Hicks-neutral effects. A dynamic productivity effect of foreign ownership arises when adoption of foreign technology and management practices takes time to fully realize. Furthermore, these dynamic adjustments may be capital or labor augmenting as adoption of advanced production technologies tends to have non-neutral productivity implications in developed countries. We propose and implement an econometric framework to estimate both effects using firm-level data from China's manufacturing sector. Our framework extends a nonparametric productivity framework, in which identification is achieved using a firm's first-order conditions and timing assumptions. We find strong evidence of dynamic and non-neutral effects from foreign ownership, with significant differences across investment sources. Investment from OECD sources is found to provide a long-term productivity boost for all but the largest recipients, while that from Hong Kong, Macau, and Taiwan does not raise performance. These findings have implications for China's declining labor share and for the rising domestic value-added content of its high-tech exports.     

Psychological ownership and organizational optimism amid China's corporate transformation: effects of an employee ownership scheme and a management-dominated board

Ownership reform was introduced to Chinese state-owned enterprises in the early 1990s, to allow employees to own a share of their enterprises and to bring changes to the underlying structure of governance. However, effectiveness of this reform has yet to be ascertained. This study examines the effects of the new employee stock ownership scheme and board compositions on the attitudes employees hold towards their jobs and organizations, as well as their perceptions of ownership. We developed a theoretical model on how participation in a stock ownership scheme (an employee's characteristic) and the composition of the board of governance (a firm characteristic) may be linked to job satisfaction and, in turn, to outcome variables such as psychological ownership and organizational optimism. This model was tested on 510 employees randomly sampled from ten stock-holding enterprises in urban Shanghai. Results indicate that participation in a stock ownership scheme has a positive effect on attitudes towards ownership, but that a board dominated by senior managers leads to gloomy perception of a firm's future. These effects were partially mediated by the satisfaction that employees felt in their jobs. The implications of these findings for management practices in China are discussed.     

Modelling wages in centrally planned economies: The case of Poland

The main idea developed in this paper is that rising excess demand for the labour force results in higher growth of wages over the notional rate of growth. The rationale is that employees change their jobs searching for higher wages, and employers are willing to offer higher pay in order to get additional workers. This relationship is highly nonlinear, and can be regarded as an extension of the idea known as the Phillips curve to the area of negative rate of unemployment. Additionally, one can observe that if the disequilibrium intensity in the labour market is small, its changes cause stronger reactions of wages in strategic branches than in the remaining sectors of the economy. It is similar to the situation of excess demand for labour. If there is a high rate of unemployment, reductions of wages affect more branches of secondary importance for the economy. The empirical investigation is based on Polish data covering the time period from 1964 through 1984. As excess demand for labour is unobservable, a proxy is used as an indicator of disequilibrium. It is introduced to the equation explaining the rate of growth of average wages, in addition to the rate of productivity growth of labour and the rate of inflation. Estimates are derived for 10 industry branches and sectors of the economy. The results confirm the initial hypothesis.     

Growth dynamics of dedicated biotechnology firms in transition economies. Evidence from the Baltic countries and Poland

Countries undergoing the difficult transition from state ownership to market economies have characteristics which are often portrayed by scholars as adverse to the development of SMEs. Others nonetheless suggest that the performance of such firms can be positively influenced by business strategies. To develop a better understanding of the relation between these two seemingly different standpoints, this paper investigates the effects of (1) human capital; (2) administration system for start-ups; (3) financial capital; and (4) intellectual property rights on the emerging biotechnology industry in Estonia, Latvia, Lithuania and Poland and considers the strategic response of two highly successful dedicated biotechnology firms (DBFs): Bioton in Poland and Fermentas in Lithuania. The results suggest that the decision to implement an internationalization strategy (and alliances with foreign partners) in association with the production of low cost, high quality products can drive the growth dynamics of SMEs.     

Spillover effects within supply chains: Evidence from Chinese-listed firms

There is increasing attention on information transfers along supply chain partners for firm (extreme) events. This growing literature finds spillover effects following certain types of firm events. Using data from credit rating actions of Chinese-listed firms over the period between March 2007 and May 2020, we examine the spillover effects of supply chains by focusing on the market reactions of event firms to the action announcements. We find strong evidence of spillover effects driven by the market reactions of event firms, which are enhanced through information diffusion channels as supply chain partners receive more investor attention. Moreover, the effects are stronger when event firms' market reactions are negative, event firms are non-stated-owned, the industry concentration of event firms is higher, or the supplier-customer business relationship is closer. Overall, these findings highlight the role of investor attention and network characteristics in supply chain spillovers.     

Motivations for enterprise system adoption in transition economies: insights from Poland

Enterprise system (ES) adoption can bring many benefits, but may also put tremendous strain on an organisation or business, sometimes with disastrous outcomes. The specific motivations and expectations that lead to ES adoption may impact the success or failure of these endeavours, and understanding these motivations may be useful in predicting the success of ES projects. Most of the published research on ES adoption motivation has been in the context of highly developed countries. The social, cultural, economic and political conditions in developing, emerging and transition economies make for a different business environment, and insights obtained from developed countries may not always transfer to these settings. This study seeks to identify and help understand the motivations for ES adoption specifically in transition economies, as these economies play a significant role in the global market, but have not been receiving adequate research attention. Drawing on the experience of 129 ES adopters in Poland, a transition economy, this study categorises motivations into coherent groups of issues and evaluates the influence of discovered motivations on ES adoption success. Further, motivations revealed by this study are compared with motivations reported by prior research conducted in developed countries.     

Patterns of technological learning within the knowledge systems of industrial clusters in emerging economies: Evidence from China

Through an interview-based exploratory study and a follow-up survey-based quantitative analysis, this paper investigates the technological learning pattern in terms of structure and mechanisms of interaction within the knowledge system of two industrial clusters in China. Unlike the recent studies that suggest that industrial cluster comprises disconnected leader-centered communities, we argue that the different leader-centered communities within the knowledge systems of industrial clusters are not disconnected from each other. Instead, those communities are inter-connected through the so-called ‘knowledge spanning mechanisms’. Regarding the interaction dimension of technological learning pattern, this paper argues that in analyzing learning behavior in the knowledge networks of industrial clusters, it is necessary to synthesize the learning opportunity perspective and the absorptive capacity perspective to better understand and explain the similarities and dissimilarities in technological learning behavior among different cluster types, across cognitive subgroups, and between product innovation and process innovation. Our study reveals that in the context of emerging countries, the following four factors are decisive for technological learning opportunities inside the knowledge networks of industrial clusters: the underlying complexity of technology in clusters, the inter-connectedness between product and process, path dependency in knowledge searching, and the incremental nature of a cluster’s technological development.     

The effect of intrapreneurial experience on corporate venturing: Evidence from developed economies

This paper examines a specific, yet unexplored, dimension of human capital; namely, intrapreneurial experience. Intrapreneurial experience is defined as a human capital attribute of employees who have a leading role in the development and implementation of re-generation activities within an organization under a proactive, innovative, and risk-oriented focus. The effect of individuals’ intrapreneurial experiences on firm creation from an organization (i.e., corporate venturing) is tested by using data collected from different countries. Using a binomial logistic regression analysis and data from the 2011 Global Entrepreneurship Monitor (GEM), results show that intrapreneurial experience is positively associated with corporate venturing. Moreover, the effect on corporate venturing seems to be higher than that exerted by other human capital variables of employees.     

Marital history and home ownership: Evidence from Australia

The relative cost of owning and renting housing and housing affordability have been clearly established as important determinants of home ownership. But the roles of marital status and history have been largely ignored. In this paper we show that both current marital status and past history affect ownership. Past history matters because wealth accumulation is greater among couple households than singles owing largely to economies of scale in housing consumption. Moreover, wealth is lost upon divorce. In effect, past marital history affects the affordability of owner housing. This result is shown in the estimation of model explaining wealth, leverage and tenure choice using Australian datasets.     

Performance-enhancing compensation practices and employee productivity: The role of workplace bullying

Performance-enhancing compensation practices are designed to increase employee productivity through greater accountability, while highlighting performance differentials across employees. While productivity increases may occur, these practices can also stimulate an unintended consequence: workplace bullying. In this paper, we present a typology and conceptual model that explore the boundary conditions under which performance-enhancing compensation practices may result in bullying behavior with differential effects on target and perpetrator productivity. We propose the mediating roles of individual competition and stress between zero-sum pay systems and workplace bullying. In our model, we propose that perpetrators will realize increased productivity. This increased productivity will be generated through instilling fear in the targeted employee to compete for output, which will increase the perpetrator's relative ranking. As a result, targets will tend to suffer decreased productivity. We conclude with a discussion of the theoretical contributions, practical implications, and offer directions for future research.     

Customer‐employee substitution: Evidence from gasoline stations

We document the adoption of self‐service pumps in U.S. gasoline stations from 1977 to 1992. Using establishment‐level data from the Census of Retail Trade over this period, we show that self‐service stations employ approximately one quarter fewer attendants per pump, all else equal. The work done by these attendants has shifted to customers, biasing upward conventional measures of productivity growth.     

Non-wage benefits,corporate ownership and firm performance in post-communist economies: evidence from Ukraine

The economic reforms in the transition economies of Central and Eastern Europe have fundamentally reshaped ownership and governance of economic production, notably through the privatization of former state-owned enterprises. These reforms were expected to transform management practices by displacing ‘cradle-to-grave’ welfare arrangements administered by state-owned enterprises. Using data drawn from two large samples of Ukrainian establishments, we investigate, in two different time points, the relationship between non-wage benefits and firm performance during the period of transition to a market economy (1994–2004). We found that non-wage benefits continued to be a critical feature of HRM practices in Ukraine during this period, and were positively associated with firm performance.     

FDI spillovers and firm productivity during crisis: Empirical evidence from transition economies

Most studies on foreign direct investment (FDI) are nested within periods of economic prosperity. Our study investigates the impact of FDI spillovers on productivity during the global financial crisis (2006–2014) and the accompanying credit shortage. A dynamic panel analysis of firm-level data from two neighbouring but distinct transition economies, Croatia and Slovenia, reveals that the impact of the crisis may go as far as halting the process of learning through spillovers if firms have difficulties in accessing external funds. The implications of the study may prove particularly beneficial to policy makers grappling with the economic crisis following the COVID-19 pandemic.     

The impact of psychological ownership on employee retention in mergers and acquisitions

Research has demonstrated that turnover rates among employees and executives in the acquired firm are much higher during an M&A event. Recent empirical and review articles on M&A have also shown that employee retention/turnover can best be understood by looking at psychological attributes and perceptions of M&As, thus drawing significant attention to the psychological and ‘human’ side voids to theoretically exploit and enhance understanding of people-related problems in M&A endeavors. In this article, we develop a moderated mediation model and propose that acquired firm employees' psychological ownership is positively related to acquired firm employees' retention through the direct and mediating effects of employees' commitment and involvement in M&A. We also propose that the effect of acquired firm employees' psychological ownership on employees' commitment and involvement and, ultimately, acquired firm employees' retention is moderated by loss of acquired firm autonomy. We also discuss implications for theory and practice, as well as future research directions of such an employees' psychological ownership perspective on retention effects.     

Private ownership economies with a finite number of equilibria

Interest in economies with a finite number of equilibria has been first drawn over by Debreu (1970). The present paper shows that such economies form a subset of dense interior of the set of private ownership economies and proves some continuity properties of the Walras correspondence. It generalizes similar results obtained for exchange economies by Dierker and Dierker (1972). Demonstrations also rest heavily on transversality theory but use somewhat stronger theorems.