Abstract
We investigate whether Confucian culture affects the adoption of employee stock ownership plans (ESOPs). Using data from a sample of Chinese A-share listed firms between 2014 and 2020, we find that Confucianism promotes firms to adopt ESOPs. This effect is concentrated in firms with high human capital intensity, intense industry competition, and less foreign culture influence. Further analysis reveals that stronger Confucian influence leads to longer lock-up periods, more employees holding, larger actual fund size, and more shares per employee for ESOPs. Finally, we suggest that by trigging ESOPs, Confucianism enhances firm value. This study highlights the importance of culture for employee incentives and extends our understanding of ESOP determinants.
Published Version
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