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How well is employee ownership working? Evidence from non-financial misconduct

Author

Listed:
  • Nguyen, Thu Ha
  • Pham, Man Duy (Marty)
  • Xiao, Yang

Abstract

This study investigates how employee activism manifested through equity ownership affects non-financial misconduct by corporate managers. We find that firms with larger employee ownership experience fewer violations and lower penalties for such wrongdoings. This effect likely arises from empowered whistleblowing and potential shareholder litigation. Additionally, employee activism against misconduct is stronger in firms with lower employee well-being, suggesting it acts as a corrective mechanism.

Suggested Citation

  • Nguyen, Thu Ha & Pham, Man Duy (Marty) & Xiao, Yang, 2024. "How well is employee ownership working? Evidence from non-financial misconduct," Finance Research Letters, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324006688
    DOI: 10.1016/j.frl.2024.105638
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    More about this item

    Keywords

    Corporate misconduct; Employee ownership; Employee share ownership plan; ESOP;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M55 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Contracting Devices

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