Selling company shares to reluctant employees
France telecom's experience
Additional information
Authors
Degeorge F.,
Jenter D.,
Moel A.,
Tufano P.
Type
Journal Article
Language
English
Abstract
In 1997, France Telecom went through a partial privatization. Using a database that tracks over 200,000 eligible participants, we analyze employees' decisions whether to participate; how much to invest; and what stock alternatives to select. The results are broadly consistent with our neoclassical model. We report four anomalous findings: (1) The firm specificity of human capital has a negligible effect on employees' investment decisions; (2) the amount invested seems driven by different forces than the decision to participate, and we attempt to measure this "threshold effect"; (3) employees “left on the table” one to two months’ salary by failing to participate; and (4) most participants underweighted the most valuable asset.
Keywords
Privatization, Employee ownership, Portfolio choice
Journal
Journal of Financial Economics
Volume
71
Number ( Month )
169-210
Diffusion
License
License undefined
Visibility
Public
Status open access
Green
