Employee ownership heterogeneity and firm performance in China

Employee ownership (EO) has gained increasingly significant attention from both business practitioners and policy makers in China. Through the examination of the implementation of EO by China's listed firms from 1992 to 2017 with a total of 3,396 firms and 36,559 firm‐year observations, we explored the relationship between EO implementation and firm performance. In general, we found that over time, EO firms outperform non‐EO firms in China, and the influence of EO is only different in nuanced aspects in different time periods according to the change of policies. The data from the most recent period, that is, 2014–2017, indicate that EO adopters have higher performance than matched non‐EO firms both before and after adoption, but the relative performance does not increase after adoption. We further examined the interactive effect between EO and executive stock ownership (ESO) schemes and found that the adoption of ESO weakens the positive relationship between EO and firm performance. Regarding different types of EO, we found lower performance in companies with high return rights but no control rights, and we found better performance when high return rights are combined with control rights. We suggested policy and managerial implications on the basis of the findings.     

Employee ownership and firm performance: a meta‐analysis

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 ( = 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.     

Psychological ownership and stewardship behavior: The moderating role of agency culture

This study investigates whether employees’ psychological ownership results in stewardship behavior and whether this relationship is affected by an employee’s perception of the organization’s agency culture. A survey of the financial managers of 129 firms in Germany generally confirms these expectations. In addition, and surprisingly, our findings suggest a negligible effect of an agency culture on the relationship between psychological ownership and stewardship behavior when managers perceive high psychological ownership. Thereby, our study enriches the literature on the consequences of psychological ownership by providing insights into the boundary conditions of such outcomes at the manager level.     

Translating corporate social performance into financial performance: exploring the moderating role of high-performance work practices

The purpose of this study is to examine the role of high-performance work practices (HPWPs) in helping to translate corporate social performance (CSP) into corporate financial performance (CFP). We employ arguments from the behavioral view of human resource management to highlight the vertical connection between a firm's proclivity for CSP and the management practices it adopts. Furthermore, we examine the moderating influence of HPWPs on the CSP–CFP linkage. Results suggest that HPWPs moderate the relationship between CSP and financial outcomes, and suggest that human resource practices may play an important role in enhancing a positive CSP–CFP relationship by helping to vertically align the behaviors of employees with the values and orientation of the organization.     

The financial and green effects of cultural values on mission drifts in European social enterprises

The sustainable social enterprises (SEs) literature shows that SEs have to simultaneously pursue economic, social, and environmental aims. However, tensions between these objectives can make this a challenging task and lead towards mission drift. This work investigates if the cultural dimension can forecast the mission drift. We empirically analyze this relationship in three stages. In the first stage, we identify a homogeneous dataset of 287 sustainable SEs from seven EU countries from 2011 to 2020. Then, in the second stage, we apply the data envelopment analysis (DEA) methodology to calculate the efficiency of the SEs. An efficient SE has to simultaneously achieve social, environmental, and economic aims. We calculate a proxy of the mission drift and generate a dichotomous category variable that assigns value 1 to the SE not affected by mission drift, 0 otherwise. In the last stage, we implement the 2SLS logistic regression between the variable that identifies the SEs affected by mission drift and three cultural dimensions: avoidance of uncertainty, masculinity, and short-term orientation.     

Chief executive officer ability,corporate social responsibility,and financial performance: The moderating role of the environment

This paper seeks to explore how chief executive officer (CEO) ability influences the economic impact of corporate social responsibility strategic decisions. Currently, the evidence on the impact of corporate social responsibility on the value of the company is mixed; in this paper, we aim to observe the moderate role played by this particularity of the CEO in the relationship between socially responsible commitment and financial performance. Our results identify that the most able CEOs make investments in social and environmental practices that lead to greater financial performance; in contrast, the less able CEOs can overinvest or underinvest in an opportunistic way for personal benefit at shareholders' expense. In addition, the role that CEO ability plays in social and environmental strategies is particularly pertinent in munificent environments that foment managerial discretion; in these contexts, high managerial ability leads to investment in socially responsible performance, which benefits shareholders by alleviating moral hazard.     

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.     

Marketing expense and financial performance in arts and cultural organizations

Nonprofit arts and cultural organizations use marketing to sustain viability. This study uses data from the Cultural Data Project to examine the effects of marketing on revenue in arts and cultural organizations. The current analysis demonstrates that total marketing expense is positively related to total revenue. Marketing expense used for fund‐raising positively influences donation income, as intended, whereas commercial income is not affected. Alternatively, marketing expense for programs positively influences both commercial income, as intended, and donation income. The novel finding from this study is that marketing expense mainly targeting non‐donor ticket buyers not only increases commercial income but also augments donation income in arts and cultural organizations.     

Corporate performance patterns of Canadian listed firms: Balancing financial and corporate social responsibility outcomes

Based on stakeholder theory and considering the conflicting performance interests of a wide range of stakeholders, this research investigates corporate performance patterns using a cluster analysis of financial, social, and environmental performance dimensions. An analysis of a Canadian sample of 771 company-year observations for the period 2014–2018 reveals three types of corporate performance: financially focused performance, balanced performance, and corporate social responsibility (CSR)-focused performance. Firms in the largest cluster, financially focused performance, deliver poor sustainable performance and prioritize financial performance over social and environmental performance. The CSR-focused performance cluster scores low for financial performance and high for environmental and social performance. The balanced-performance cluster also has higher levels of sustainable performance but is the smallest cluster, accounting for a quarter of the sample. Overall, this study presents a portrait of corporate performance balancing financial and CSR objectives and the evolution of this activity over the research period.     

Exploring environmental,social, and governance disclosure effects on the S&P 500 financial performance

Much of the literature measuring the relationship between environmental, social, and governance (ESG) scores and firm performance treats the score as a measure of sustainability performance. In this study, we treat a firm's ESG score as a demonstration of strategic choice in the level of transparency that results in increased firm performance as measured by Tobin's Q and return on assets. Performance differences are a result of choice moderated by the size of the firm as measured by employees and sales. We analyze 467 firms in the S&P 500 from 2009 to 2015. Applying legitimacy and stakeholder theory, we find that there is significant difference between groups with respect to disclosure and performance. The results of quartile analysis by sales, capitalization, and Tobin's Q are relevant to understand the influence that the ESG score has on financial performance. ESG influences on Tobin's Q are greatest for large firms as measured by sales, as opposed to the ESG affects on Tobin's Q and return on asset for smallest firms as measured by market capitalization.     

The effects of technical and social conditions on workplace trust

This paper investigates the extent to which the technical and social contexts of organizations independently affect levels of workplace trust. We argue that, in an organizational context, trust is not just a relationship between an individual subject (the truster) and an object (the trustee) but is subject to effects from the conditions of the work relationship itself. We describe the organizational context as comprising both a technical system of production (where work gets done through the specification of tasks) and a social system of work (where problems of effort, compliance, conformity and motivation are managed). We analyse the relationship between trust and these two aspects of workplace context (technical and social systems). We also operationalize this in terms of differences between industries, occupational composition and human resource management practices. The model is tested using data drawn from the 1995 Australian Workplace Industrial Relations Survey. The results confirm that differences in industry, occupational composition and HRM practices all impact on levels of workplace trust. We review these results in terms of their implications for future research into the problem of analysing variation in trust at both the workplace and individual levels.     

Family ownership and stockholder reactions to environmental performance disclosure: A test of secondary agency relationships

Using the first ever Newsweek “Green Rankings” of the 500 largest U. S. firms in 2009 as a significant historical event, we test for the stockholder reaction to ratings of corporate environmental performance. Both the conventional null hypothesis significance testing and Bayesian approaches show that stockholders react significantly more positively to corporations with higher ratings of corporate environmental performance and that this effect is stronger in family owned firms. Our findings suggest that majority shareholders do not necessarily appropriate minority stockholders' rents when investing in environmental activities, as would be the case in the presence of “Type II” agency conflicts between majority family owners and minority stockholders. The family ownership effect is also found to be stronger in dirty (heavy polluting) industries as well as in more competitive and more opaque industry contexts.     

The importance of HR practices and workplace trust in achieving superior performance: A study of public-sector organizations

This paper assesses the impact of bundles of HR practices on workplace trust, job satisfaction, commitment, effort and perceived organizational performance. A theoretical model is developed and tested using data collected through a postal survey of UK local government employees. The results support the hypothesis that HR practices are powerful predictors of trust and organizational performance. These findings demonstrate the need for public organizations to re-evaluate their current battery of HR practices in an attempt to improve overall performance.     

The cross‐cultural study of LMX and individual employee voice: The moderating role of conflict avoidance

This article examines the role of national culture, measured by conflict avoidance, on the relationship between leader–member exchange (LMX) and individual employee voice. Using data collected from automotive industry employees in the United States and Korea, the findings show that conflict avoidance is negatively related to employee voice and also moderates the relationship between LMX and employee voice in the Korean sample. In particular, the relationship between LMX and voice becomes less positive when conflict avoidance is high. On the other hand, conflict avoidance does not have a direct effect on employee voice as well as an interactive effect with LMX on employee voice in the U.S. sample. This study, therefore, highlights the importance of the national culture in the comparative study of employee voice.     

Green supply chain integration and financial performance: A social contagion and information sharing perspective

Although green supply chain integration (GSCI) has received wide attention, how it diffuses among supply chain members to affect the manufacturer's performance is still unclear. This study examines the relationships among GSCI, information sharing, and financial performance from a social contagion lens. By conceptualizing GSCI into three forms, two types of contagion mechanisms (i.e., cohesion and structural equivalence) were identified to investigate the underlying contagion effects between different forms of GSCI and the effects of various GSCI on information sharing and financial performance. Survey data were collected from 206 Chinese manufacturers and analyzed using structural equation modeling to test hypotheses. The results indicate that green supplier integration directly promotes green internal integration, green customer integration, and information sharing with suppliers. Green internal integration positively influences green customer integration and financial performance. Green customer integration enhances information sharing with customers. Both information sharing with suppliers and customers improve financial performance. This study contributes to the GSCI literature and provides novel managerial implications for manufacturers.     

Linking organizational identification and employee performance in teams: the moderating role of team-member exchange

This study examined the influence of organizational identification on employee performance in teams. Drawing on social identity theory and self-verification theory, we predicted that organizational identification would have positive effects on employee in-role and organizational citizenship behavior (OCB) performance. Building on social exchange theory, the study further theorized that the quality of team-member exchange (TMX) would amplify the impacts of organizational identification on both types of performance. Using data from automotive dealer employees in China, we found positive relationships between organizational identification and both types of performance. In addition, TMX altered the impact of organizational identification on OCB.     

An expanded investigation into the relationship of corporate social responsibility and financial performance

While many studies have examined the relationship of the two constructs of financial performance and CSR, little consensus has emerged. This study investigates the relationship through a set of comprehensive and long-term financial measures, which include both accounting and market returns. Also, an established CSR database generated through a validated CSR research instrument is used in a new, more thorough manner. While the regression analyses reveal no relationship to exist between the constructs, a number of methodological factors are proposed to play a role in contributing to such findings.     

Human resource managers' role consistency and HR performance indicators: the moderating effect of interpersonal trust in Taiwan

This study explores the consistency between human resource (HR) managers' roles and HR performance indicators. In particular it considers the moderating effects of interpersonal trust on the relationship between HR managers' roles and HR performance indicators. We selected 116 HR managers from the top 500 manufacturing companies in Taiwan as our sample, and hierarchical regression analysis was conducted to test our hypotheses. The results showed that the HR managers' roles were consistent with HR performance indicators. Also, a high level of affective trust weakened the positive relationship between HR manager roles and HR performance indicators. Thus we suggested that Chinese companies should design HR performance indicators according to the roles HR managers play. Additionally, when HR managers are playing the role of a strategic partner or change agent, top executives should avoid high affective trust with HR managers.     

The re-examination of the relationship between employee stock ownership and voluntary employer change intention in Taiwan

Although past literature had provided inconsistent conclusions as to whether or not employee stock ownership (ESO) can serve the function of employee retention, this paper proposes that the reason for such inconsistency lies in the inability to clarify ESO characteristics. Therefore, this study examines the relationship between ESO and voluntary employer change intention from the viewpoint of vested and portable characteristics. Study results indicated that vested ESO achieves the function of employee retention. However, when vested ESO is also portable, employees tend to spend more efforts searching for external ESO alternatives, which reinforce their voluntary employer change intention.