Shared Capitalism across Europe: What is the influence of national culture on the effectiveness ?

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According to influential economists, alternative, structural innovations of the capitalist model are needed, as the capitalist model has become more and more incompatible. Employee share ownership is gaining popularity in search for such innovations. This research first investigates the effect of broad-based employee share ownership on firm performance in European firms, including the influence of national cultural values on the effectiveness. Based on agency theory, psychological ownership theory, reflection theory, and gift exchange theory, the relationship is hypothesized to be positive. Second, the relationship of broad-based employee share ownership on firm performance is hypothesized to be stronger in low power distance countries and high individualistic countries. Based on data from the Cranet Network, a linear mixed model analysis was conducted with a sample of 2,347 private firms from 26 different European countries. The results of the analysis support all three hypotheses, meaning that broad-based employee share ownership positively effects firm performance, and low power distance and high individualism are important contextual variables strengthening the positive relationship of broad-based employee share ownership and firm performance. With testing the employee share ownership-firm performance relationship, and the influence of the contextual national cultural values, this research especially contributes to the employee share ownership literature within HRM. Keywords Cranet, employee share ownership, firm performance, power distance, individualism
Faculteit der Managementwetenschappen