Introduction

There is a long tradition of academic research into the nature, causes and consequences of financial participation of employees in their enterprises which can be traced back into the nineteenth century. In the past two decades, financial participation has attracted renewed interest among academics and policy makers alike. In several European countries, legislation that is supportive of financial participation has been introduced, while in others debates have been initiated between the social partners. In Germany, several changes have been made to the Capital Formation Law (

Vermögensbildungsgesetz

) during the 1990s. Financial participation was also propagated by former Chancellor Gerhard Schröder as “one of the pillars of the Social Market Economy” (Schröder, 2000), and only recently the German President Horst Köhler appealed to the social partners that “the time has come to bring up the issue of a financial participation of employees again” (Köhler, 2006).