"Does employee ownership influence corporate debt maturity structure ?"

Abstract : Employee ownership has become a widespread phenomenon over the last decades and employee owners tend to have a major impact on corporate governance. Researchers have been largely focused on the effects of employee ownership on firm performance and corporate governance efficiency and have documented mixed results. In this paper, we expand the consequences of employee ownership by considering its impact on corporate capital structure decisions, namely debt maturity structure. Using a panel dataset of French listed firms from 2014 to 2019, we document a non-linear (U-shaped) relationship between employee ownership and the use of long-term debt. This relationship does not depend upon the extent of employee representation on the boards of directors. Our evidence confirms both the bright and dark sides of employee ownership and suggests that the development of employee ownership in French companies must be carefully controlled.