What are the determinants and managerial motivations for employee ownership in retirement pension plans

Abstract Using the pension database obtained from Form 5500 from 2000 to 2014, we provide the first comprehensive analysis of the determinants of employee ownership in retirement pension plans. By investigating various motivations simultaneously using the horse racing method, we find that firms with higher idiosyncratic risk, weak governance, a greater marginal tax rate, and greater union intensity are more likely to offer employee ownership. This study provides valuable insights to investors that they should properly understand the impact of employee ownership on the firm and appropriately evaluate firms with employee ownership by taking into account diverse motives.