Employee stock ownership plan in European banks: The role of supportive measures.
Isabelle Distinguin, Laetitia Lepetit  1  , Phan Huy Hieu Tran  2@  
1 : Laboratoire d'Analyse et de Prospective Economiques  (LAPE)
Université de Limoges
5 rue Félix Eboué, 87031 Limoges -  France
2 : Université de Limoges  (UNILIM)  -  Site web
Laboratoire d'analyse et de prospectives économiques
33 rue François Mitterrand BP23204 87032 Limoges -  France

We investigate whether the different government supportive measures (legal, fiscal and political measures) are effective in promoting ESOPs for European banks, by taking into account the different nature of the agency conflicts in widely-held and controlled banks. Our findings show empirical evidence that the effectiveness of the ESOP measures are different in controlled and widely-held banks according to the strength of the agency conflicts between insiders and outsiders. We find for controlled banks that supportive measures are effective to promote the ESOPs adoption independently of the degree of opacity, while we find that they are only effective in widely-held banks with lower degrees of opacity. We furthermore find that that the supportive measures are effective to promote ESOP in controlled banks located in countries with stronger levels of shareholder protection. For widely-held banks, the supportive measures are ineffective to promote ESOPs adoption, independently of the level of shareholder protection.


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