The effect of employee share ownership on employee commitment and turnover.

This study first demonstrates how employee share ownership (ESO) benefits organizations differ depending on cultural and institutional context. In South Korea, which the culture tends to be collectivistic and the labor market to be characterized as a coordinated market economy, ESO aids firms by promoting employee commitment (i.e., Golden Path Effect). In Britain, which the culture tends to be low in power distance and uncertainty avoidance and high in masculinity, and the labor market to be characterized as a liberal market economy, ESO benefits firms by lowering employee turnover rates (i.e., Golden Handcuff Effect). However, these effects are evident only when the economy is doing well. The effects disappear during the economic downturn. Therefore, our research suggests that firms should be wary of expecting the benefits of ESO during the recession.