Employee ownership and attitudes: The role of selection effects

Studies of employee ownership (EO) have repeatedly cautioned that selection effects may be in part responsible for the apparent effects of EO on employee attitudes. Favourable attitudes among employee owners may result from individuals with positive views towards EO selecting into the company or the EO plan. Using data from a US employee stock ownership plan (ESOP), this study investigates whether EO as a factor in employment choice influences psychological ownership and preferences for working in EO firms in the future. The findings reveal that joining the company due to EO has a substantial, independent effect on psychological ownership beyond the influence of plan participation. The article quantifies the magnitude of this selection effect. Additionally, joining for this reason strongly impacts preferences for future employment in employee-owned firms.