Bank Employee Incentives and Stock Purchase Plans Participation

Thomas Rapp and Nicolas Aubert ()

Post-Print from HAL

Abstract: We investigate which factors influence 44,649 employees' decision to invest in a top retail banking group in France. We have two objectives: (i) to explore factors associated with the amount invested in the plan, and (ii) to explore whether these factors have same associations with the probability of investing more than the incentive pay i.e. being an active investor. Specifically, we focus on four parameters that have been shown to affect participation: liquidity constraints, imperfect knowledge of the plan, asset choice, and transaction costs. We confirm Engelhardt and Madrian (Natl Tax J 57:385–406, 2004) assumptions according to which such factors contribute to explain non-participation. We show that ESPP contributors have very specific and unobserved motivations, as shown with the positive correlations between error terms in the two steps of investment decisions. The existence of unobservable investment motives can be explained by a lower risk aversion, a higher time preference, or a strong willingness to participate to corporate governance.

Keywords: Household Finance; employee stock purchase plan (search for similar items in EconPapers)
Date: 2011
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01256781v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Journal of Financial Services Research, 2011, ⟨10.1007/s10693-011-0104-0⟩

Downloads: (external link)
https://shs.hal.science/halshs-01256781v1/document (application/pdf)

Related works:
Journal Article: Bank Employee Incentives and Stock Purchase Plans Participation (2011)
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:hal:journl:halshs-01256781

DOI: 10.1007/s10693-011-0104-0

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().