Employee participation and Corporate social performance: The influence of financial participation and board representation
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2025-07-07
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en
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This study examines the influence of employee financial participation and employee board representation on corporate social performance. Based on legitimacy and stakeholder theory, a positive relationship between employee participation types and CSP is expected through an increased sense of responsibility towards the organization and enhanced employee voice in decision making. In addition to the main effects of employee board representation and employee financial participation, moderating effects between the different types of participation are also investigated. An external perspective is added through the mediating effect of union presence. Using a dataset that includes 10,305 firm year observations for large European firms across 27 countries between 2012-2022 the results show that both employee board representation and employee financial participation have a significant influence on CSP. Furthermore, evidence of a synergy effect between board representation and profit sharing plans is found, and union representation is shown to positively moderate the effect of employee board representation on corporate social performance. The findings suggest that firms looking to increase their social performance should promote employee board representation and employee financial participation while supporting union involvement.
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Faculteit der Managementwetenschappen