Foundation ownership, reputation, and labour

Christa Børsting and Steen Thomsen

Oxford Review of Economic Policy, 2017, vol. 33, issue 2, 317-338

Abstract: A number of firms in northern Europe and especially in Denmark are owned by private foundations similarly to what would have been the case if the Ford Foundation had owned a majority of the shares in Ford Motor Company. Foundation-owned companies appear to perform surprisingly well in terms of profitability and growth, despite lacking governance mechanisms such as profit incentives or takeover threats. Given their non-profit ownership, they might be expected to behave more responsibly towards stakeholders, such as employees or customers (Hansmann, 1980), but so far there has been little empirical evidence to support this hypothesis. This paper presents new research on the reputation and responsibility of foundation-owned companies. In a panel of large Danish companies 2001–11 we find that foundation-owned firms have better reputations and are regarded as more socially responsible in corporate image ratings. Secondary evidence on labour market behaviour is consistent with these findings. Using matched employer–employee data we show that foundation-owned companies are more stable employers, pay their employees better, and keep them for longer. Altogether, the evidence indicates that foundation-ownership is associated with more responsible business behaviour towards employees.

Keywords: foundation ownership; reputation; labour; corporate governance (search for similar items in EconPapers)
JEL-codes: G34 J54 L21 L31 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://hdl.handle.net/10.1093/oxrep/grx023 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxford:v:33:y:2017:i:2:p:317-338.

Access Statistics for this article

Oxford Review of Economic Policy is currently edited by Christopher Adam

More articles in Oxford Review of Economic Policy from Oxford University Press and Oxford Review of Economic Policy Limited
Bibliographic data for series maintained by Oxford University Press ().