Determinants of Financial Participation in the EU: Employers’ and Employees’ Perspectives

Abstract

Purpose

The purpose of this paper is to investigate the incidence of employee financial participation (EFP) schemes in Europe and examine the factors that influence the likelihood of (i) a company offering EFP schemes and (ii) employees taking up EFP schemes.

Design/methodology/approach

Using a combination of descriptive and econometric techniques, the paper provides information on the incidence of EFP schemes in the EU and profiles a typical company and a typical employee that, respectively, offers and takes up EFP schemes. The empirical investigation is based on two models employing probabilistic techniques. Data used for this analysis include the European Company Survey (ECS) conducted in 2009 and three rounds of the European Working Conditions Survey (EWCS) conducted in 2000, 2005, and 2009.

Findings

Results display a significant rise in EFP in the EU-27 in the last decade. In addition, results seem to suggest that the employees’ and companies’ characteristics, as well as sector and region of operation explain some of the variation in likelihoods of companies and employees, respectively, offering and taking up EFP schemes.

Research limitations/implications

Due to data limitation, our analysis lacks a dynamic assessment of the relationship between parameters. Studies that exploit longitudinal data are suggested to follow this paper.

Originality/value

This paper contributes to the existing empirical literature by examining jointly the determinants of financial participation from both employers’ and employees’ perspective.

Citation

Hashi, I. and Hashani, A. (2013), "Determinants of Financial Participation in the EU: Employers’ and Employees’ Perspectives", Sharing Ownership, Profits, and Decision-Making in the 21st Century (Advances in the Economic Analysis of Participatory & Labor-Managed Firms, Vol. 14), Emerald Group Publishing Limited, Leeds, pp. 187-215. https://doi.org/10.1108/S0885-3339(2013)0000014009