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Selling company shares to reluctant employees : France telecom's experience

  • Degeorge, François Istituto di finanza (IFin), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera
  • Jenter, Dirk MIT Sloan School of Management, Cambridge, MA, USA
  • Moel, Alberto Monitor Corporate Finance, Monitor Group, Cambridge, MA, USA
  • Tufano, Peter Harvard Business School and NBER, Soldiers Field, Boston, MA, USA
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  • Journal of Financial Economics. - 2004, vol. 71, no. 169-210
English In 1997, France Telecom went through a partial privatization. Using a database that tracks over 200,000 eligible participants, we analyze employees' decisions whether to participate; how much to invest; and what stock alternatives to select. The results are broadly consistent with our neoclassical model. We report four anomalous findings: (1) The firm specificity of human capital has a negligible effect on employees' investment decisions; (2) the amount invested seems driven by different forces than the decision to participate, and we attempt to measure this "threshold effect"; (3) employees “left on the table” one to two months’ salary by failing to participate; and (4) most participants underweighted the most valuable asset.
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