The productivity effects of employee ownership, profit sharing and worker representation on boards

By analyzing panel data for firms in three separate industries and also using multiple measures of employee ownership and profit sharing, often we find that both employee share ownership and profit sharing with employees significantly increase firm productivity. Additionally, employee representation on the board has never had a significant impact one way or the other on enterprise productivity. In some cases, we also find that worker ownership and profit sharing are complements. Our findings vary across industries and point to the potential importance of industry-specific factors such as differences in size and capital intensity in accounting for this variation in findings. However, we also present results that indicate that worker ownership and profit sharing have independent effects and, in a few instances, worker ownership reduces the effectiveness of profit sharing (and vice versa).