An investigation of differences in profitability between employee owned and conventional businesses.

摘要

Employee ownership has historically been on the fringe of practitioner literature and academic research. As a result, employee ownership remains on the fringe of social and political consciousness in the US. This research contributes to the ongoing discussion and understanding of the employee Stock Ownership Program phenomena in the United States. This research is an empirical examination of the research question: How are ESOP's and conventionally owned businesses similar in performance? This research provided an additional financial perspective to the ongoing discussion and understanding of the ESOP phenomena in the United States. The principle emphasis were (a) directly comparing the two predominant businesses types in the United States, ESOPs and conventionally owned businesses and (b) addressing a gap in knowledge. Both were accomplished through statistically testing five theoretical hypotheses. Five financial ratios (ROE, Market Capitalization, Net Margins, EBIT and ROA) were examined using financial data from 2010, 2011 and 2012 to determine statistical similarities and differences.;The results of this research were mixed. The research found statistical differences in profitability between the two types of businesses in twelve of the fifteen ratios. However, there were no statistical differences between two types of businesses in two financial ratios, ROE (2010) and market capitalization (2010 and 2012). These findings indicate that ESOPS may have positive economic advantages, in the five ratios examined, when compared to conventional businesses. A more robust study should be performed to verify these results, to measure the extent of benefit and examine specific industries.