![401(k) matching contributions in company stock: Costs and benefits for firms and workers [An article from: Journal of Public Economics]](https://www.ebooknetworking.net/books/B00/0RR/bigB000RR9JQC.jpg)
401(k) matching contributions in company stock: Costs and benefits for firms and workers [An article from: Journal of Public Economics]
Book Details
Author(s)J.R. Brown, N. Liang, S. Weisbenner
PublisherElsevier
ISBN / ASINB000RR9JQC
ISBN-13978B000RR9JQ5
AvailabilityAvailable for download now
Sales Rank10,600,601
MarketplaceUnited States 🇺🇸
Description
This digital document is a journal article from Journal of Public Economics, published by Elsevier in 2006. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
This paper tests for important determinants of why some employers provide matching contributions for 401(k) plans in company stock. We find that firms that match in company stock have lower stock price volatility and lower bankruptcy risk and are also more likely to offer a defined benefit plan, consistent with a recognition that imposing a concentrated portfolio can be costly for employees. Evidence also indicates that firms match with company stock to help deter takeovers by putting stock into friendly hands. Simulation results suggest that while portfolio-optimizing employees are made worse off by having their match restricted to company stock, sufficiently risk tolerant employees who follow naive investment strategies might prefer a 401(k) plan at a company with a company stock match to a plan at a company with an unrestricted match.
Description:
This paper tests for important determinants of why some employers provide matching contributions for 401(k) plans in company stock. We find that firms that match in company stock have lower stock price volatility and lower bankruptcy risk and are also more likely to offer a defined benefit plan, consistent with a recognition that imposing a concentrated portfolio can be costly for employees. Evidence also indicates that firms match with company stock to help deter takeovers by putting stock into friendly hands. Simulation results suggest that while portfolio-optimizing employees are made worse off by having their match restricted to company stock, sufficiently risk tolerant employees who follow naive investment strategies might prefer a 401(k) plan at a company with a company stock match to a plan at a company with an unrestricted match.
