The Productivity Effects of Employee Stock-Ownership Plans and Bonuses: Evidence from Japanese Panel Data
Type of Work
American Economic Review
The authors report the first results for Japanese firms on the effects of employee stock-ownership plans (ESOPs) and bonuses by estimating production functions using new panel data. They find that the introduction of an ESOP will lead to a 4-5 percent increase in productivity; this productivity payoff takes three to four years. There is a modest productivity gain from the bonus system. The authors also find evidence that the productivity effect of bonuses is enhanced by the existence of ESOPs, suggesting that ESOPs may create a climate conducive to profit-sharing by enhancing long-term commitment and peer monitoring.
Jones, Derek C. and Kato, Takao, "The Productivity Effects of Employee Stock-Ownership Plans and Bonuses: Evidence from Japanese Panel Data" (1995). Hamilton Digital Commons.
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