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Employee share ownership and investment concentration: which employee shareholders fail to diversify?
Author(s) -
Pendleton Andrew
Publication year - 2010
Publication title -
human resource management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.44
H-Index - 77
eISSN - 1748-8583
pISSN - 0954-5395
DOI - 10.1111/j.1748-8583.2010.00128.x
Subject(s) - shareholder , portfolio , business , distribution (mathematics) , investment (military) , duration (music) , labour economics , demographic economics , finance , economics , corporate governance , mathematical analysis , mathematics , literature , politics , political science , law , art
Using data from a survey of employees in three UK companies, the article examines concentration of savings in employer shares. It is found that a substantial minority of employees hold most of their savings in employer shares despite the risks. The article examines the distribution and determinants of portfolio concentration. It is found that portfolio concentration is more likely to be found among men, those on higher incomes, and those who are in early middle‐age. Regression analysis indicates that organisational commitment and the duration of participation in the share ownership plan also affects the probability of having a concentrated portfolio. There is no clear evidence that those with substantial concentrations of employer shares take active steps to monitor their investments more closely than those with smaller shareholdings.