Abstract
The Employee Stock Ownership Plan (ESOP) is a long-term corporate welfare policy that allows employees to share the profits and growth benefits of the enterprise by owning the ordinary share of the enterprise. It has always been a research hotspot at home and abroad. Sustainable growth refers to the healthy and sustained growth of enterprises. ESOP has been re-implemented in China since 2014. Using dual fixed effects model, this paper empirically analyzes 6940 observations of Chinese listed companies from 2014 to 2018. We study whether ESOP can improve the sustainable growth rate of enterprises by allowing employees to hold equity, linking their personal interests to the interests of enterprises, and thus playing an incentive and supervisory role to effectively reduce enterprise agency costs. In the research process, we find that the data can help us objectively analyze the economic management problems of enterprises. However, when using the data for analysis, the correlation coefficient and significance should be analyzed together.
Highlights
Employee stock ownership plan (ESOP, the following are expressed with Employee Stock Ownership Plan (ESOP)) is a long-term welfare policy that allows employees to share the company profits and corporate growth benefits by owning ordinary share of the enterprise
Whether ESOP has effectively improved the sustainable growth rate of enterprises? This is the direction of this paper
The empirical result shows that our hypothesis is valid, the implementation of ESOP has a significantly positive correlation to the sustainable growth rate of enterprises, but the positive correlation is negligible since the correlation coefficient is small
Summary
Employee stock ownership plan (ESOP, the following are expressed with ESOP) is a long-term welfare policy that allows employees to share the company profits and corporate growth benefits by owning ordinary share of the enterprise. It has always been a research hotspot at home and abroad. In order to explore whether there is a positive correlation between ESOP and SGR, this paper uses the two-factor fixed effect model and fix time effect and industry effect to analyze it. The empirical result shows that our hypothesis is valid, the implementation of ESOP has a significantly positive correlation to the sustainable growth rate of enterprises, but the positive correlation is negligible since the correlation coefficient is small. The reasons for the result in this paper are discussed in the part Discussion, and future improvement and further research directions are proposed
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