Title: Impact of employee stock ownership on firm financial performance: does corporate social responsibility matter?

Authors: Zyed Achour

Addresses: GEF-2A Lab, University of Tunis, Tunis, Tunisia; National Institute of Labour and Social Studies, University of Carthage, Tunis, Tunisia

Abstract: The debate surrounding the relationship between employee stock ownership (ESO) and firm financial performance (FFP) remains contentious. While previous research has viewed this connection as direct, this study proposes an indirect relationship. Drawing on agency theory, property rights theory, and a resource-based view, we argue that employee stock ownership fosters enhanced financial performance. Additionally, building on existing theoretical and empirical literature, we hypothesise a positive association between CSR and FFP. Our analysis of panel data from 72 listed French companies (2010-2020) confirms a significant relationship between ESO and FFP. Moreover, our findings suggest CSR acts as a partial mediator in this relationship. These results shed light on how ESO and financial performance interact, with CSR playing a mediating role. Policymakers, practitioners, and academics can use this insight to develop strategies for inclusive, sustainable corporate governance that maximise value for shareholders and society.

Keywords: employee stock ownership; ESO; corporate social responsibility; CSR; agency theory; incentive rights theory; firm performance; ESG; Tobin's Q; SBF120; firm financial performance; FFP.

DOI: 10.1504/IJMED.2024.139275

International Journal of Management and Enterprise Development, 2024 Vol.23 No.2, pp.155 - 170

Received: 03 Mar 2024
Accepted: 21 Apr 2024
Published online: 28 Jun 2024 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article