| China Securities Regulatory Commission(CSRC)promulgated the instruction of implementation of employee stock ownership plans(ESOP)for listed companies in June,2014.In consequence,I decide to conduct empirical study on the incentive effects of ESOPs for domestic listed companies.This paper tries to provide suggestions for the listed companies that will implement ESOP and make some contribution for the system improvement and sustainable development of the ESOP in China.By the method of event study and linear regression,this paper studies three topics: whether ESOP has a positive effect on stock price and firm performance,which kind of company is more suitable for implementing ESOP and how to design ESOP to produce better incentive effect.This study shows that stock prices will increase significantly but not sustainably after the announcement of ESOP.Besides,ESOP plays a significant role in the improvement of firm performance but ownership structure,growth rate and capital structure will influence the incentive effects of ESOP.In addition,the longer the lock-up period of ESOP is,the better its incentive effect is.Finally,it finds that ESOP still has positive effects on firm performance in the consideration of endogeneity. |
