Employee Ownership in an Emerging Market Economy

Theoretical Considerations and the Empirical Evidence of the Hungarian Corporate Panel Survey

Abstract

The study investigates the role of employee ownership in the emerging market economy of Hungary in the 1990s. We first briefly summarise the core of the various approaches to the problem of workers' participation in economic organisations. We focus our attention on the specific circumstances under which different forms of corporations owned by employees are more likely to survive in an "ideal typical" market economy. After a short theoretical survey we turn to the empirical evidence provided by the Hungarian Corporate Panel Survey, and try to test the theoretical hypotheses about the major determinants of the emergence of employee ownership in organisations. The data from the early and late 1990s show that basic characteristics of Hungarian industrial companies with employee ownership more or less follow the expected patterns. Nevertheless, the adopted explanatory variables can explain only a small part of the variance of form of ownership. Moreover, the large number of organisations with employee ownership in our samples remain unexplained.