Understanding Financial Participation across Market Economies

Abstract

Organizations implement a range of financial participation plans to help create a stronger linkage between corporate and individual goals. Although seemingly an organizational-level choice as to what plans are adopted, we argue that institutional constraints at the market economy level of analysis that directly affect worker-firm relationships play a significant role in this choice. Based on organization-level data from nineteen countries, comparisons of the level of profit-sharing and equity-ownership plan use are explained through varieties of capitalism theorizing. The findings indicate the usefulness of this level of analysis in explaining corporate practice in financial participation.

Keywords:

• financial participation
• varieties of capitalism
• institutions
• profit sharing
• equity ownership