Employee Stock Ownership Plan,Factor Market And Enterprises' Total Factor Productivity

The economic development of our country has been changed to high quality development stage from rapid growth stage,which means that we must pay more attention to efficiency,quality and the total factor productivity(TFP).Enterprises are the basis of the social economy,improving the quality of China's economic development should be based on the total factor productivity of enterprises.The TFP of enterprises depends on the contribution of human capital.As a resources,labor is an important part of a enterprise who can benefit to the technology and resource allocation.However,enterprises generally pay more attention to entrepreneurs' incentives and managements' incentives,ignoring the incentives to staff members,which leads to serious conflicts of the employees' interests and the enterprises' interests,and then limits the improvements of enterprises' TFP.In 2014,the commission of China released a guidance about how to implement a employee stock ownership plan(ESOP)in listed enterprises,aims to encourage enterprises to optimize corporate governance structurn and improve the allocation efficiency by ESOP.Employee stock ownership plan is a means of profit distribution,aims to develop a stable relationship between capital factor and labor factor,enterprise and employee interests,employees and employees interests through sharing stocks to employees by ESOP.However,there are a lot of limited applicability in ESOP,the positive effects of ESOP need the supports of reasonable system design and effective factor market.How can ESOP make a positive effect to enterprises' TFP? What results can the differences in ESOP design and factor market development level make to enterprises' TFP?Based on the above problems,this paper tests the relationship between ESOP and enterprises' TFP based on the listed companies samples in 2010 to 2018 year.The research contents includes:(1)Based on the binding function and symbiosis theory,we explores that comparing enterprises that have not implemented ESOP,whether the ESOP enterprises have a significantly high TFP? What is the key reason to improve enterprises' TFP by ESOP?(2)Based on the theory of distribution of cake,we divided the ESOP factors into right,equity and risk.And then test the effect of ESOP factors.(3)Based on the signal transmission theory,financing constraints theory and the human capital theory,we analysis the moderating effect of capital market and labor market to ESOP and enterprises' TFP to explore the limited applicability of ESOP.This paper find that:(1)Employee stock ownership plan can benefit to enterprises' TFP.The key reason is that ESOP can help coordinate the relationship between employees and enterprises.Further more,this paper find that ESOP can promote enterprise innovation and restrain financial allocation,and then improving enterprises' TFP.What's more,the above effects is more significant in state-owned enterprises and enterprise in regions of high social trust level;(2)Among the factors of ESOP,the right factor of ESOP has an inverted U-shaped effect to the enterprise's TFP.When the shareholding ratio exceeds 4%,it may aggravate the improper financial allocation of the enterprise,and then lead to the decline of TFP.The higher the distributive equity,the lower the risk,the better the effect of ESOP to TFP;(3)The positive effect of ESOP to enterprises' TFP can not leave the capital market.This paper find that the stock price information and the financing environment effect the relationship between ESOP and TFP.The more information in stock price volatility,the better role that stock market plays;The more financial organizations in the province where the company is located,the better ESOP's impact to enterprises' TFP;(4)The positive effect of ESOP to enterprises' TFP can not leave the labor market.This paper find that the wage bargaining power(WBP)and human capital endowment positively effect the relationship between ESOP and TFP.The higher WBP of employees,the better role that enternal labor market plays in ESOP and TFP;The higher human capital endowment of employees,the better ESOP's impact to enterprises' TFP.The research conclusions of this paper have the following theoretical contributions and innovations:(1)For the purpose of improving the quality of enterprise development,this paper deeply explore the impact of employee stock ownership plans on total factor productivity,to make up for the lack of research on the economic consequences of domestic employee stock ownership plans,and to help reveal the mechanism of ESOP to the enterprises' TFP;(2)Dividing the elements of ESOP from the perspective of rationality of distribution,and analyzing the different effects of system design,is conducive to clarifying the internal logic of employee stock ownership plans to exert governance effects.(3)In-depth exploration of the moderating effects of the capital market environment and labor market environment on the relationship between ESOP and TFP is conducive to revealing the interactive mechanism between the factor market environment and the effectiveness of the employee stock ownership plan.Based on the research conclusions,this paper puts forward corresponding policy suggestions :(1)Reasonable design the elements of ESOP according to the internal and external environment,so as to improve the total factor productivity of enterprises;(2)The government should supplement and improve taxation and other related policies to encourage and support the effective and orderly implementation of ESOP;(3)To improve the distortion of resource allocation and build a benign market environment conducive to the implementation of ESOP;(4)Investors should study and judge the information contained in the employee stock ownership plan,predict the quality of enterprise development and invest rationally.The practical significance of this paper is mainly reflected as follows:(1)It is conducive for companies to independently choose whether to launch an employee stock ownership plan based on specific conditions,and design reasonable elements and clauses to further stimulate the value of ordinary employees' human capital,thereby optimizing the corporate governance structure and improving the efficiency of resource allocation.(2)It has important guiding significance for my country to further open the capital market,reduce government intervention,and build a benign market environment,thereby improving the effectiveness of the implementation of the employee stock ownership plan.(3)It is conducive to investors and regulatory authorities to reasonably judge the implementation effects of the company's ESOP and make rational investment and regulatory decisions.