Research On Motivative Mechanism Of ESOP In Chinese Hi-tech SOE Reform

Focsuing on the defect that there is no uniform logical framework for the studies on the ESOP reform of Chinese Hi-tech state-owned enterprises (SOEs), this paper combines the nature of SOE reform with the foundational functions of ESOP, the inderent mechanism of motivation, the production attribute of Hi-tech firm and the proerties of human capital to build a uniform logical framework for the ESOP reform of Chinese Hi-tech SOEs and study the decision of equity allocation in such a reform. The main conclusions and contributions are as follows.1. Based on an anlysis of the foundational functions of ESOP, the nature of SOE reform, the inderent mechanism of motivation, the production attribute of Hi-tech firm, the proerties of human capital and the law environment in China, this paper forms a uniform logical framework for Chinese Hi-tech SOE reform (including the ESOP reform), that is. Chinese SOE reform should follow the inherent logics among human capital, ownership, motivation, the production attribute of firm, performance and economic efficiency.2. Applying the above framework, this paper points out that governments should trade off between the return and the control claims deriving from state-owned assets in the Hi-tech SOE reform in China, otherwise they are likely to face a tickler that they regulate themselves. This trade-off requires that governments should not directly intervene firm's internal decisions but commit themselves to realize Pareto efficiency under the condition of the value preservation and appretiation of state-owned assets in Chinese Hi-tech SOE reform. Therefore, governments should, to some degree, give up the control claim on SOEs in such a reform.3. In the above framework, this paper concludes that adopting ESOP can enhance firm's operational efficiency and achieve the value preservation and appreciation of state-owned assets by acknowledging the ownership of employees' human capital of Hi-tech SOEs and stimulating them in means of the ownership characterized by equity. This makes it possible for governments to give up the control claim partly. Hence, ESOP is a feasible alternative for governments to trade...