For numerous employee firms, a larger ESOP seems to help mitigate the free rider effect associated with larger firms, but it isn’t conclusive because evidence is from a limited and unique sample. The free rider effect can potentially be overcome through peer pressure and co-monitoring. There are some cases where the benefits of these productivity gains of worker ownership don’t trickle up to voting shareholders
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For numerous employee firms, a larger ESOP seems to help mitigate the free rider effect associated with larger firms, but it isn’t conclusive because evidence is from a limited and unique sample. The free rider effect can potentially be overcome through peer pressure and co-monitoring. There are some cases where the benefits of these productivity gains of worker ownership don’t trickle up to voting shareholders