Financial Participation and Collective Conflicts: Evidence from French Firms

Studies on financial participation show positive effects across several “performance” outcomes, yet given the potential to realign employee interests, distribute rewards, and improve commitment little is known about the ability of financial participation to reduce collective conflicts. Using French establishments, we explore the impact of profit sharing and employee share ownership schemes on various measures of conflict. Across various specifications, estimators, and time periods, financial participation reveals an ability to reduce some but not all forms of conflict. Employee share ownership seems especially effective in reducing a range of conflicts including the most extensive and costly forms.