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Effectiveness of policy measures to promote employee share ownership programs in banks

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  • Tran, Phan Huy Hieu

Abstract

We investigate the effectiveness of the national supportive policy suggested by the European Commission to promote employee share ownership programs (ESOP) in European banks. We find that supportive measures are effective to promote ESOP in widely-held banks, independently of their degree of opacity and the level of shareholder protection. However, supportive measures are only effective to promote ESOP in closely-held banks if they are more transparent or located in countries with higher levels of shareholder protection. Our findings indicate that European countries not only need to implement supportive measures but also to enhance transparency and shareholder protection to promote ESOP. To identify the causal effect between the national supportive policy and ESOP adoption, we use the number of labor-support-parties in parliament as the instrumental variable for the supportive measures.

Suggested Citation

  • Tran, Phan Huy Hieu, 2020. "Effectiveness of policy measures to promote employee share ownership programs in banks," Journal of Behavioral and Experimental Finance, Elsevier, vol. 28(C).
    • Handle: RePEc:eee:beexfi:v:28:y:2020:i:c:s2214635020303282
    DOI: 10.1016/j.jbef.2020.100401
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    More about this item

    Keywords

    Employee share ownership programs; Banks; Governance; Policy evaluation;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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