Carolin Ahrens’s research while affiliated with University of Göttingen and other places

While multinational firms invest large amounts of money in employee stock ownership plans (ESOPs) to reduce turnover, there is little evidence regarding ESOPs' effectiveness in retaining rank-and-file employees and none on a global scale. Building on psychological ownership (PO) arguments, we predict that a rank-and-file employee's ESOP participation will be negatively associated with a firm exit decision and that this effect will be stronger in contextual settings that are more conducive to turnover. For our analysis, we used internal data from a large multinational firm covering 190,453 rank-and-file employees and approximately 650,000 employee years. We find that ESOP participation is associated with a lower likelihood of individual firm exit decisions. We also find this effect to be more pronounced in countries with favorable labor market conditions and lower uncertainty avoidance (UA). Additional tests support our argument that PO arising from ESOP participation is particularly important for rank-and-file employees, who often only invest small amounts. Overall, our study provides cross-country evidence regarding the retention effect of ESOP participation for rank-and-file employees.

Employee stock-ownership plans (ESOPs) offered by multinational enterprises (MNEs) present an attractive investment for employees. Puzzlingly, participation rates are often low, raising the question what drives ESOP participation on a global scale. Grounded in the knowledge-based view of expatriate research, we build on the notion of expatriates as implicit knowledge transferors within MNEs. We hypothesize a positive effect of expatriate ESOP participation on subsidiary-employee ESOP participation, which is even higher when a subsidiary-employee's distance toward the program and the firm is greater. Empirical results confirm our hypotheses suggesting that expatriates can be a mechanism to bridge the distance within MNEs.