Determinants of Corporate Social and Environmental performance: the Impact of Employee Financial Participation
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2018-06-27
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en
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Abstract
This study examines the relationship between employee financial participation plans and corporate environmental and social performance, using a panel dataset of 761 European listed firms for the period 2006-2017. Making a distinction between (broad-based) share plans, stock options and profit sharing plans, the results show that share plans have significant positive effects on corporate social and environmental performance, and that these effects are even stronger when share plans are broad-based. Contrary, profit sharing plans are found to have a significant negative effect on firms’ environmental performance. In addition, the results show that combinations of share plans with option plans or profit sharing plans have positive non-financial performance effects, indicating that a combination of different types of plans could unleash each plan’s potential as well as compensate for individual disadvantages. These findings extend the literature on financial participation by showing that employee financial participation plans have significant performance effects that go beyond solely financial performance. This provides new opportunities for governments and other stakeholder to boost corporate sustainability by stimulating employee financial participation.
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Faculteit der Managementwetenschappen