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The role of peer effects in corporate employee welfare policies

Rind, A.A.
; ; 
Boubaker, S.
; 
Lajili-Jarjir, S.
; 
Mollah, S., Mahi, M.,
Publication Date
2022-07
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Keywords
Peer effects, Nonwage labor costs and benefits, Employee welfare, Employee well-being, Behavioral finance
Rights
© 2021 The Authors. British Journal of Management published by John Wiley & Sons Ltd on behalf of British Academy of Management. This is an open access article under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
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Yes
Open Access status
openAccess
Accepted for publication
08/03/2021
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Management and Law Publications
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Abstract
This paper investigates the role of peer effects in the employee welfare policies of organizations. Using US panel data for a sample of 11,451 firm-year observations from 1996 to 2017, we find that firms’ employee welfare decisions are driven by their peers and show that peer firms play a significant role in defining corporate employee welfare policies. Our findings are robust to various sensitivity checks, including alternative definitions of employee welfare, alternative peer proxies, and several identification strategies. Our additional analysis shows that herding behavior is prevalent in followers, who mimic leaders' behavior, but we do not find any such relationship for industry leaders. Further, we show the evidence suggesting that mimetic and normative isomorphic pressures are driving the peer effects. Finally, we document the economic consequence of peer mimicking in employee welfare policies. Our findings on firms’ peer effects and herding behavior have policy implications.
URI
http://hdl.handle.net/10454/18505
Version
Published version
Citation
Rind AA, Akbar S, Boubaker S et al (2022) The role of peer effects in corporate employee welfare policies. British Journal of Management. 33(3): 1609-1631.
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Link to published version
Link to Version of Record
https://doi.org/10.1111/1467-8551.12513
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Article
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