Working Paper: NBER ID: w7683
Authors: François Degeorge; Dirk Jenter; Alberto Moel; Peter Tufano
Abstract: 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.
Keywords: No keywords provided
JEL Codes: G0; G10; G11; G20; G32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| employee characteristics (M51) | participation in stock offering (G24) |
| employee characteristics (M51) | investment amounts (G11) |
| tenure at France Telecom (L96) | participation in stock offering (G24) |
| tenure at France Telecom (L96) | investment amounts (G11) |
| financial wealth (G51) | participation in stock offering (G24) |
| financial wealth (G51) | investment amounts (G11) |
| salary (J31) | participation in stock offering (G24) |
| salary (J31) | investment amounts (G11) |
| former employees and retirees participation (J26) | investment amounts (G11) |