For citation:
Buchinskaya, O. N. (2021). Effectiveness of Employee Participation in the Capital of their Enterprise: Russian and International Experience. Zhurnal Economicheskoj Teorii [Russian Journal of Economic Theory], 18(1), 48-55, https://doi.org/10.31063/2073-6517/2021.18-1.3
Abstract:
The use of employee participation in the ownership of enterprises has become widely spread since the second half of the twentieth century. Alongside the development of various forms of employee participation in property, there have been ongoing theoretical debates about the effectiveness of these forms, for instance, whether employee property is a reliable method to increase the efficiency of a capitalist enterprise or just an attempt to implement elements of the socialist doctrine. The study aims to analyze the international perspective on employees’ equity participation in property, in particular the focus is made on the world’s most common ESOP plan. The methodological framework is based on international studies discussing the impact of ESOP plans on the economic and financial performance of enterprises. These studies deal with the experience of developed countries as well as developing countries, from China to Cameroon. The positive impact of employee property on increasing the productivity of the enterprise is shown. In terms of financial indicators, the research results are inconsistent. In general, there is a weak positive, mainly indirect impact of partial ownership of employees on the financial performance of their enterprises. Moreover, in developed countries the effectiveness of ESOP is higher than in developing ones. The authors draw conclusion on unsatisfactory state of Russian enterprises with employee ownership which is reflected in steady decline in quantity of Russian public enterprises. The study includes explanation of reduction in the number of public enterprises, and recommendations for their organizational and legal type reform in order to improve the effectiveness in application of collective ownership in Russian conditions. The research results are used to give recommendations for improvement of the efficiency of shared employee ownership in Russia. It is shown that the concept of collective ownership in Russia should be reconsidered and the new types of employee participation in enterprise ownership should be based on protected minority corporatization.
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