The effect of shareholder governance on employment and and unemployment: a review of the literature

Abstract

The purpose of this article is to analyse the impact of shareholder governance on employment and unemployment through a literature review. More precisely, it aims to identify all the transmission channels studied, which range from the financial profitability standard demanded by shareholders to the level of unemployment. Both empirical and theoretical studies point to the deleterious effect of the financial return standard on employment. Several explanatory mechanisms can be highlighted, such as a crowding-out effect on productive investment or the search for risk transfer from shareholders to employees. In other words, while shareholder governance is supposed to improve corporate performance, the perspective adopted is only that of the short term, since insufficient investment and insufficient job creation deprive firms of productivity gains and productive capacity in the longer term.