The Impact Of Employee Stock Ownership Plan On Business Performance

In 2014,the China Securities Regulatory Commission issued the "Guiding Opinions on the Implementation of Employee Stock Ownership Plan Pilot Program for Listed Companies",marking an important initiative and institutional arrangement for the construction of institutional system and further promotion of the implementation of mixed ownership reform in China’s capital market in the context of deepening reform of state-owned enterprises.It has been nearly 10 years since the Guidance was promulgated,and more than 990 listed companies have implemented employee stock ownership plans during this period,accumulating a large amount of practical data.In previous studies,scholars have discussed the theoretical basis and announcement effects of employee stock ownership plans,but due to the short time since the Guidance was promulgated and insufficient research samples,the research on how employee stock ownership plans affect the business performance of listed companies and the effect of employee stock ownership plans implemented by state-owned enterprises is not sufficient.This paper examines the effect of implementing employee stock ownership plan on the improvement of business performance of enterprises listed in China from 2014 to 2021 by regression analysis,using the operational data of the relevant enterprises as the sample.The results of the study show that after controlling for the industry effect and the time effect,enterprises implementing employee stock ownership plans have better performance in terms of improved business performance than those not implementing them,and this still holds when considering endogeneity.To further test the positive contribution of employee stock ownership plans to firms’ operating performance,this study also replaces the explanatory variable ROE with ROA,and the results are consistent with the benchmark regression and pass the robustness test.In the regression results of state-controlled enterprises and non-state-controlled enterprises grouping,the positive effect of employee stock ownership plan on state-controlled enterprises is relatively insignificant.