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Employee participation in employee stock ownership plans: Cross‐level interaction effects of institutions and workgroup behavior
Author(s) -
Oehmichen Jana,
Wolff Michael,
Zschoche Ulrike
Publication year - 2017
Publication title -
human resource management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.888
H-Index - 94
eISSN - 1099-050X
pISSN - 0090-4848
DOI - 10.1002/hrm.21885
Subject(s) - workgroup , multinational corporation , business , transaction cost , rationality , microfoundations , economics , marketing , finance , political science , computer network , computer science , macroeconomics , law
In this multilevel study, the authors investigate the influence of country‐level formal institutions and workgroup behavior on foreign subsidiary employees' participation in employee stock ownership plans (ESOPs). Based on the perspectives of bounded rationality, transaction cost theory, and psychological ownership, the authors argue that weak formal institutions restrain multinational enterprises from effectively implementing ESOPs due to reduced employee participation. However, the authors expect that workgroup behavior—more specifically, the participation of the workgroup's members and superiors in ESOPs—has a positive influence on employees' ESOP participation. Furthermore, the authors analyze whether cross‐level effects of institutions and workgroup behavior function as substitutes or complements. They empirically examine the ESOP participation of 185,291 foreign subsidiary employees in 28 countries. The results confirm the hypotheses about direct effects of weak institutions and workgroup behavior and additionally provide support for a complementary relationship between institutions and workgroup behavior.