Financial Participation: Does the Risk Transfer Story Hold in France?

27 Pages Posted: 22 Feb 2016

See all articles by Leila Baghdadi

Leila Baghdadi

University of Tunis - Tunis Business School

Rihab Bellakhal

University of Tunis - Tunis Business School

Marc‐Arthur Diaye

Université d'Evry Val d'Essonne

Date Written: March 2016

Abstract

Several articles report a positive effect of financial participation (profit sharing (PS) and employee share ownership) on firms' economic performance. This increase can be obtained in two main ways: by increasing the effort (extrinsic, intrinsic or commitment) of workers, directly or indirectly through worker selection; or by transferring more risk to the workers. The question is, of course, not neutral. Indeed, if the risk transfer story is true then it means that the increase of economic performance is obtained at the expense of workers, who take on the burden of more risks. The question is especially important in France where financial participation is associated with tax exemption for firms and where it is forbidden by law to substitute base wage and PS. The purpose of our article is to use an employer–employee dataset to answer the question of whether financial participation schemes are mainly designed as a risk transfer (from firms to workers) device.

Suggested Citation

Baghdadi, Leila and Bellakhal, Rihab and Diaye, Marc‐Arthur, Financial Participation: Does the Risk Transfer Story Hold in France? (March 2016). British Journal of Industrial Relations, Vol. 54, Issue 1, pp. 3-29, 2016. Available at SSRN: https://ssrn.com/abstract=2735192 or http://dx.doi.org/10.1111/bjir.12044

Leila Baghdadi (Contact Author)

University of Tunis - Tunis Business School

El Mourouj 2074
Kassaa, 2059
Tunisia

Rihab Bellakhal

University of Tunis - Tunis Business School

El Mourouj 2074
Kassaa, 2059
Tunisia

Marc‐Arthur Diaye

Université d'Evry Val d'Essonne

Boulevard François Mitterrand
Evry, Ile de France 91025
France

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