The determinants of employee ownership in China's privatized rural industry: Evidence from Jiangsu and Shandong

This paper examines the determinants of employee share ownership in newly privatized township and village enterprises (TVEs) in Shandong and Jiangsu. We find that expected financial returns,job security, risk preference, and family wealth are important determinants of employee share holdings. However, the accessibility of share ownership to employees is also affected by the local leaders' preferences for managerial buy-outs relative to their concern for improving work incentives, their desire to maximize sales revenue, and the position, residential status, and gender of an employee.