Employee stock ownership and firm exit decisions: A cross-country analysis of rank-and-file employees

While multinational firms invest large amounts of money in employee stock ownership plans (ESOPs) to reduce turnover, there is little evidence regarding ESOPs' effectiveness retaining rank-and-file employees and none on a global scale. Building psychological (PO) arguments, we predict that employee's ESOP participation will be negatively associated with firm exit decision this effect stronger contextual settings are more conducive turnover. For our analysis, used internal data from covering 190,453 approximately 650,000 years. We find lower likelihood individual decisions. also pronounced countries favorable labor market conditions uncertainty avoidance (UA). Additional tests support argument PO arising particularly important for employees, who often only small amounts. Overall, study provides cross-country the retention employees.