The investigation of employee stock ownership is undertaken using microeconomic theory and the in-depth empirical analysis of two metropolitan newspapers with long histories of extensive employee ownership. Economic theory suggests that there are four important considerations beyond current tax incentives in employee and employer decisions to institute employee stock ownership: (1) preference for ownership in the employing firm by employees, (2) expected incentive effects on productivity and information flows in the firm, (3) the potential for participation in the oversight of the firm by stock owning employees, and (4) job and portfolio mobility considerations of employees. A review of existing studies of firms with employee stock ownership suggests that the four important considerations suggested by economic theory have not been empirically documented to a great extent; particularly expected effects on information flows and actual production in organizations. An in-depth investigation of the importance of the four non-tax considerations in two metropolitan newspapers is undertaken using financial data. The results indicate the importance of the four theoretical considerations in determining the impact of employee stock ownership on the operation of a firm. In the analysis of newspapers the study suggests that important externalities to a locality may be involved in the ownership structure of the local news media. The microeconomic investigations at a theoretical and empirical level suggests several macroeconomic implications for public policy aimed at increasing employee ownership of stock through tax incentives to firms that adopt employee stock ownership plans (ESOPs). Reaching macroeconomic policy. goals of increased production, employment and employee firm attachment as a result of increased employee stock ownership depends upon the inducement of changes in the internal operations of firms with stock plans as suggested and documented by this microeconomic investigation. / Ph. D.