Selling Company Shares to Reluctant Employees: France Telecom's Experience

In 1997, France T‚l‚com, the state-owned French telephone company, went through a partial privatization. The government offered current and prior France T‚l‚com employees the opportunity to buy portfolios of shares with various combinations of discounts, required holding periods, leverage, tax treatment, and levels of downside protection. We adapt a neoclassical model of investment decision-making that takes into account firm-specific human capital and holding period restrictions to predict how employees might respond to the share offers. Using a database that tracks over 200,000 eligible participants, we analyze the employees' characteristics and their decisions whether to participate; how much to invest; and what form of stock alternatives they selected.

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

In 1997, France Telecom, the state-owned French telephone company, went through a partial privatization. We adapt a standard neoclassical model to predict how employees might respond to the firm's offer to sell them various classes of shares. Using a database that tracks over 200,000 eligible participants, we analyze employees' decisions whether to participate; how much to invest; and what form of stock alternatives they selected. The results are broadly consistent with the neoclassical model. However, we report four anomalous findings: (1) The firm specificity of human capital has a negligible effect on employees' investment decisions; (2) the amount of funds invested in the stock plans seems driven by a different set of forces than the decision to participate, which we suspect reflects a "threshold effect" that we attempt to measure; (3) employees "left on the table" benefits equal to one to two month's salary by failing to participate; and (4) most participants underweighted the most valuable asset

Submicron Structures Technology and Research

Contains table of contents for Part I, table of contents for Section 1 and reports on fourteen research projects.Joint Services Electronics Program (Contract DAAL03-86-K-0002)Joint Services Electronics Program (Contract DAAL03-89-C-0001)National Science Foundation (Grant ECS-87-09806)Semiconductor Research Corporation (Contract 87-SP-080)Hampshire Instruments CorporationNational Science Foundation (Grant ECS-85-03443)U.S. Air Force - Office of Scientific Research (Grant AFOSR-88-0304)National Science Foundation (Grant ECS-85-06565)X-Opt., IncorporatedU.S. Air Force - Office of Scientific Research (Grant AFOSR-85-0154)National Aeronautics and Space Administration (Grant NGL22-009-683)KMS Fusion, Incorporate

Submicron Structures Technology and Research

Contains table of contents for Part I, table of contents for Section 1 and reports on thirteen research projects.Joint Services Electronics Program Contract DAAL03-89-C-0001National Science Foundation Grant ECS 87-09806Semiconductor Research Corporation Contract 87-SP-080Hampshire Instruments CorporationNational Science Foundation Grant ECS-85-03443U.S. Air Force - Office of Scientific Research Grant AFOSR-88-0304U.S. Air Force - Office of Scientific Research Grant AFOSR-85-0154X-Opt., IncorporatedNational Aeronautics and Space Administration Contract NAS8-36748AT&T Bell Laboratorie

Submicron and Nanometer Structures Technology and Research

Contains reports on twenty research projects and a list of publications.Defense Advanced Research Projects Agency Contract N00019-92-K-0021Joint Services Electronics Program Contract DAAL03-92-C-0001National Science Foundation Grant ECS 90-16437U.S. Army Research Office Grant DAAL03-92-G-0291IBM CorporationU.S. Air Force - Office of Scientific Research Grant F49620-92-J-0064National Science Foundation Grant DMR 87-19217National Science Foundation Grant DMR 90-22933Defense Advanced Research Projects Agency Consortium for Superconducting ElectronicsNational Aeronautics and Space Administration Contract NAS8-36748National Aeronautics and Space Administration Grant NAGW-200

Submicron and Nanometer Structures Technology and Research

Contains reports on sixteen research projects and a list of publications.Joint Services Electronics Program Contract DAAL03-89-C-0001Joint Services Electronics Program Contract DAAL03-92-C-0001National Science Foundation Grant ECS 90-16437Semiconductor Research Corporation Contract 90-SP-080U.S. Navy - Naval Research Laboratory Contract N00014-90-K-2018IBM CorporationU.S. Air Force - Office of Scientific Research Grant F49620-92-J-0064National Science Foundation Grant DMR 87-19217National Science Foundation Grant DMR 90-22933National Aeronautics and Space Administration Contract NAS8-36748National Aeronautics and Space Administration Grant NAGW-2003National Science Foundation Grant DMR 90-01698Spire Corporatio

Corporate Governance in Latin America

This paper analyzes recent trends of Latin America's institutional development regarding investor protection. In spite of the underdevelopment of the region's financial markets, there is slow movement towards legal reforms intended to protect investors and make regional markets more attractive to investors; current inadequacies in the region's legal institution's generate high levels of ownership concentration, poor access to external equity financing, and narrow equity markets. The evidence in this paper, based on firm-level data for six countries, shows that, like legal protection of investors, appropriate firm-level corporate governance is linked to lower costs for capital, better valuation, performance, and dividend payments across countries. Firms can compensate for their countries' legal deficiencies by distinguishing themselves through improved corporate governance practices, thus increasing transparency and limiting potential conflict between large and minority shareholders. Firms can additionally look for capital by issuing ADRs, as they have in recent years, although this practice undermines local capital markets. In the end, firms and regulators must improve their governance structures and shareholder protections if they are to meet the improved benchmarks of developed nations brought about by Asian, European, and U.S. scandals in recent years