Firm purpose and employee ownership

This paper presents an analytical economic democracy-shared capitalism framework to better understanding of the nature and firm-level drivers of employee ownership, in particular the purpose of the firm. This framework allows us to answer the question: to what extent and how does firm purpose affect the nature of employee ownership? We empirically assess the extent to which firm purpose is related to distinct employee ownership types, with data from a survey of a representative sample of 620 firms with more than ten employees in The Netherlands. Our findings show that worker cooperatives are strongly associated with firms pursuing a social purpose, while employee share ownership and profit and gain sharing are not. In fact, shared capitalism forms of employee ownership do not significantly differ in firm purpose from firms without employee ownership.