A press release announced that Employee ownership and participation effects on firm outcomes, a study conducted by Brent Kramer, provides evidence that majority employee-owned businesses are more productive than their traditionally-owned counterparts:

Many theorists have suggested that the rarity of employee ownership is prima facie evidence that such firms could not be as efficient as traditional firms, because otherwise they would be more common. But institutional and financing constraints may be a more realistic explanation for their rarity, and it is important for policy purposes to investigate efficiency objectively...

Using a matched-pair differences test, sales per employee is substantially and significantly higher for the employee-owned group of firms. This "employee-owned advantage" is significantly greater among smaller firms, and (holding firm size constant) improves as the dollar value of the average employees' ownership stake in firm stock goes up. Holding both firm size and employee stake constant, the employee-owned advantage is substantially (though not significantly) greater in the large group of firms which are 100% owned by their ESOP Trusts...

Resistance to broadening employee ownership may come in part from academic arguments that such a structure must reduce firm (and thus social) efficiency. This study belies those unjustified theoretical arguments. Broader employee ownership and employee participation in firm management, which have intrinsic social benefits, improve firm outcomes—and thus social welfare—as well.

Here is a copy of the press release:

WASHINGTON, June 18 /PRNewswire-USNewswire/ -- Recent research by Brent Kramer, a doctoral candidate at the City University of New York, provides strong evidence that majority employee-owned businesses have a significant advantage over comparable traditionally-owned businesses in sales per employee. The average advantage, $44,500, means that a typical 200 person ESOP firm could be expected to have an almost $9 million annual sales advantage over its non-ESOP counterpart. Sales per employee is the total of a companys sales divided by the number of employees, and is a commonly used measure of a companys productivity.

A few highlights of the study:

• Using standard statistical methods, it was found that the average sales advantage for the ESOP firms in the study was $44,500, or an average of an 8.8% sales per employee advantage over their non-ESOP counterparts in the same industry and of the same size.
  
• It was found that firms that ask for non-management employee input into innovation in work processes have a greater employee-owned advantage in sales per employee.
  
• Kramers research indicates the sales per employee advantage for the 50% plus ESOP companies compared to non-ESOP companies is less for larger employers.

What is important about this study is that it substantiates what we have been saying about ESOP companies being more productive for the past 30 years. When matched along side non-ESOP firms, employee owned companies are more productive as defined by the traditional productivity measure of sales per employee, said J. Michael Keeling, President of The ESOP Association.

The study, Employee Ownership and Participation Effects on Firm Outcomes, was conducted by Brent Kramer, an economics doctoral candidate at the time of the study and now a Ph.D. The Employee Ownership Foundation, the 501(c)(3) affiliated foundation of The ESOP Association provided funding for the research and The ESOP Association contributed membership information for the study. A total of 328 ESOP firms and over 2,000 matching non-ESOP firms were included in the study.