Chinese Employee Stock Ownership Plan and Corporate Innovation: Interest Alignment or Market Capitalization Management

HONG Feng

Volume 36 Issue 2

May 2021

Turn off MathJax

Article Contents

Article Navigation > Journal of Guangdong University of Finance & Economics > 2021 > 36(2): 69-85

HONG Feng. Chinese Employee Stock Ownership Plan and Corporate Innovation: Interest Alignment or Market Capitalization Management[J]. Journal of Guangdong University of Finance & Economics, 2021, 36(2): 69-85.

Citation:

HONG Feng. Chinese Employee Stock Ownership Plan and Corporate Innovation: Interest Alignment or Market Capitalization Management[J]. Journal of Guangdong University of Finance & Economics, 2021, 36(2): 69-85.

Citation:

PDF( 1035 KB)

Chinese Employee Stock Ownership Plan and Corporate Innovation: Interest Alignment or Market Capitalization Management

HONG Feng

School of Economics and Management, North China University of Technology, Beijing 100014, China

Received Date: 2020-10-24
Available Online: 2021-05-06
Publish Date: 2021-03-28

Abstract

Abstract

Compared with the American employee stock ownership (ESOP) that is a retirement plan for all employees, Chinese ESOP is a non-retirement plan aimed at core employees who participate by providing funds instead of no cost and hold the shares with more flexibility. Based on the data of listed companies in China's A-share market from 2011 to 2017, this paper examines the relationship between ESOP and the output of enterprise innovation, and further investigates the difference in the impact of ESOP on enterprise innovation under different path orientations of ESOPs characterized with governance-driven plans, incentive-driven plans and binding-driven plans. It is found that both incentive-driven plans and binding-driven plans have positive impact on innovation output while governance-driven plans show no influences but the binding-driven plans are proved to have the most significant impact. The influence mechanism test shows that incentive-driven plans promote the effort of employees in innovation activities, while binding-driven plans decrease the employee turnover and improve managerial risk-taking. The findings are consistent with "view of interest alignment" instead of "view of market capitalization management", which means Chinese ESOPs benefit the corporate innovation.
- employee stock ownership plan,
- enterprise innovation,
- innovative output,
- interest intermediation,
- market capitalization management,
- key minor employees

FullText(HTML)

References(34)

References

[1]	BEATTY A. The cash flow and informational effects of employee stock ownership plans[J]. Journal of Financial Economics, 1995, 38(2): 211-240. doi: 10.1016/0304-405X(94)00812-F
[2]	KIM E H, P OUIMET. Broad-based employee stock ownership: motives and outcomes[J]. The Journal of Finance, 2014, 69(3): 1273-1319. doi: 10.1111/jofi.12150
[3]	BOVA F, KALIN K, THOMAS J, et al. Non-executive employee ownership and corporate risk[J]. The Accounting Review, 2014, 90(1): 115-145. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2297996
[4]	AUBERT N, KERN A, X HOLLANDTS. Employee stock ownership and the cost of capital[R]. Working Paper, Aix-marseille University, 2018.
[5]	BOVA F, Y DOU, O K HOPE. Employee ownership and firm disclosure[J]. Contemporary Accounting Research, 2015, 32(2): 639-673. doi: 10.1111/1911-3846.12084
[6]	周冬华, 黄佳, 赵玉洁. 员工持股计划与企业创新[J]. 会计研究, 2019(3): 63-70. doi: 10.3969/j.issn.1003-2886.2019.03.009
[7]	孟庆斌, 李昕宇, 张鹏. 员工持股计划能够促进企业创新吗?——基于企业员工视角的经验证据[J]. 管理世界, 2019(11): 209-228. doi: 10.3969/j.issn.1002-5502.2019.11.016
[8]	孙即, 万丽梅. 员工持股计划在上市公司实践的效果、问题和建议[R]. 证监会研究报告, 2015.
[9]	LOGUE J YATES. Modeling an employee ownership sector[J]. Peace Review, 2000, 2: 243-249.
[10]	KELSO L D, M J ADLER. The capitalist manifesto[M]. New York: Random House, 1958.
[11]	WEITZMAN MARTIN L. The share economy[M]. Cambridge: Harvard University Press, 1984.
[12]	ELLERMAN D. The democratic worker owned firm[M]. Boston: Unwin Hywan, 1990.
[13]	BLAIR M. Ownership and control: rethinking corporate governance for the twenty-first century[M]. Washington D.C. : The Brookings Institution, 1995.
[14]	CORE J E, W R GUAY. Stock option plans for non-executive employees[J]. Journal of Financial Economics, 2001, 61(2): 253-287. doi: 10.1016/S0304-405X(01)00062-9
[15]	王砾, 代昀昊, 孔东民. 激励相容: 上市公司员工持股计划的公告效应[J]. 经济学动态, 2017(2): 37-50.
[16]	蒋运冰, 苏亮瑜. 员工持股计划的股东财富效应研究——基于我国上市公司员工持股计划的合约要素视角[J]. 证券市场导报, 2016(11): 13-22.
[17]	孙即, 张望军, 周易. 员工持股计划的实施动机及其效果研究[J]. 当代财经, 2017(9): 45-58.
[18]	CONTE M A, BLASI J, KRUSE D, et al. Financial returns of public ESOP companies: investor effects vs. manager effects[J]. Financial Analysts Journal, 1996, 52(4): 51-61. doi: 10.2469/faj.v52.n4.2011
[19]	CHANG S, D MAYERS. Managerial vote ownership and shareholder wealth: evidence from employee stock ownership plans[J]. Journal of Financial Economics, 1992, 32(1): 103-131. doi: 10.1016/0304-405X(92)90027-U
[20]	KUMBHAKAR S C, A E DUNBAR. The elusive ESOP-productivity link: evidence from U.S. firm-level data[J]. Journal of Public Economics, 1993, 52(2): 273-283. doi: 10.1016/0047-2727(93)90024-N
[21]	黄桂田, 张悦. 国有公司员工持股绩效的实证分析——基于1302家公司的样本数据[J]. 经济科学, 2009(4): 86-94.
[22]	陈大鹏, 施新政, 陆瑶, 等. 员工持股计划与财务信息质量[J]. 南开管理评论, 2019(1): 166-180. doi: 10.3969/j.issn.1008-3448.2019.01.015
[23]	MANSO G. Motivating innovation[J]. The Journal of Finance, 2011, 66(5): 1823-1860. doi: 10.1111/j.1540-6261.2011.01688.x
[24]	CHEMMANU T, X TIAN. Do antitakeover provisions spur corporate innovation? a regression discontinuity analysis[J]. Journal of Financial and Quantitative Analysis, 2018, 53 (2): 1-32.
[25]	CHAPLINSKY S, G NIEHAUS. The role of ESOPs in takeover contests[J]. The Journal of Finance, 1994, 49(4): 1451-1470. doi: 10.1111/j.1540-6261.1994.tb02461.x
[26]	HOCHBERGY V, L LINDSEY. Incentives, targeting, and firm performance: an analysis of non-executive stock options[J]. The Review of Financial Studies, 2010, 23(11): 4148-4186. doi: 10.1093/rfs/hhq093
[27]	LOW A. Managerial risk taking behavior and equity-based compensation[J]. Journal of Financial Economics, 2009, 92(3): 470-490. doi: 10.1016/j.jfineco.2008.05.004
[28]	BERTRAND M, S MULLAINATHAN. Enjoying the quiet life? corporate governance and managerial preferences[J]. Journal of Political Economy, 2003, 111(5): 1043-1075. doi: 10.1086/376950
[29]	田轩, 孟清扬. 股权激励计划能促进企业创新吗[J]. 南开管理评论, 2018(3): 176-190. doi: 10.3969/j.issn.1008-3448.2018.03.017
[30]	ANG J S R, A COLE, J W LIN. Agency costs and ownership structure[J]. Journal of Finance, 2000, 55(1): 81-106. doi: 10.1111/0022-1082.00201
[31]	姜付秀, 马云飙, 王运通. 退出威胁能抑制控股股东私利行为吗?[J]. 管理世界, 2015(5): 147-159.
[32]	BENTLEY K A, T C OMER, N Y SHARP. Business strategy, financial reporting irregularities, and audit effort[J]. Contemporary Accounting Research, 2013, 30(2): 780-817. doi: 10.1111/j.1911-3846.2012.01174.x
[33]	CHANG X, K FU, A LOW, et al. Non-executive employee stock options and corporate innovation[J]. Journal of Financial Economics, 2015, 115(1): 168-188. doi: 10.1016/j.jfineco.2014.09.002
[34]	KAPLAN S N, L ZINGALES. Do financing constraints explain why investment is correlated with cash flow?[J]. Quarterly Journal of Economics, 1997, 112: 169-215. doi: 10.1162/003355397555163