This article presents results from two studies implemented in the USA from 1990 to 1993. A main finding of the studies was that participatory decision-making in employee ownership firms seems to be a key explanatory variable to relatively faster growth rates than in conventional firms. Other indicative findings on participatory employee ownership firms outperforming conventional participatory firms lead us to hypothesize whether employee ownership and participatory decision-making may have a synergistic performance effect. A longitudinal approach mainly suggests that employee ownership firms perform worse than conventional firms before the inception of an employee ownership programme, but better afterwards. The findings are discussed in relation to economic theories on profit sharing and on participatory and labour-managed firms.
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