Research On Correlation Between Employee Stock Ownership And Corporate Performance In Chinese Listed Companies

Since the 1950 s, academia have continued to study the correlation between employee stock ownership, executives or ordinary employees, and corporate performance. However, the issue has been in debate whether employee stock ownership and corporate performance are related or linearly related or not. Recently, scholars have considered the problem of time lag and endogenous of variables, which is more in line with the actual situation of corporate governance when research the correlation between employee stock ownership and corporate performance. Due to the limitations of acquisition of large sample data and proper selection and use of econometric models in favor of analysis inter-temporal influences among variables, achievements of study about correlation between these two variables is a small number and are disputed, which is based on dynamic endogenous perspective. However, implementation of employee stock ownership plan is in the stage of rapid growth in Chinese listed companies, therefore, the implementation experience of these plans is urgently needed to provide references for them.Under such a circumstance, this paper made an empirical analysis of the correlation between employee stock ownership and corporate performance by using SYS-GMM model and threshold regression model with the principal-agent theory and equity incentive theory as the theoretical basis, data of A-share listed companies in 2008--2014 years as study sample and dynamic endogenous as research perspective, and conclusions are as follows. First, neither executive ownership nor common employee stock ownership in non-state-owned listed companies is related to corporate performance obviously. Second, in the state-owned listed companies, executive ownership has a significant impact of inverted U-shaped on corporate performance, while common employee stock ownership has not. And the impaction goes with lag effect and affected by the measure. Third, in the state-owned listed companies, corporate performance has a significant feedback and inter-temporal role on managerial ownership. At the same time, some new phenomena are found. At first, appropriate to reduce the proportion of state-owned shares will help promoting the corporate performance. Second, the higher satisfaction the staff have with their own shareholdings, the more significant impaction executive ownership will bring to corporate performance. And through threshold regression analysis, we found that satisfaction of employees for their own shareholdings will help executive ownership promote corporate performance when it's higher than sixty-three percent. Third, according to the current average employee satisfaction of state-owned listed companies, if level of executive ownership controlled in less than eight point zero two percent, promotion to corporate performance will show, otherwise.Based on above conclusions and combined with the status of implementation of employeeowned in listed companies, we discussed some countermeasures and suggestions in detail about how to promote the implementation of employee stock ownership on two levels of listed companies and government departments. First of all, listed companies should improve internal governance structure, establish a scientific performance appraisal system, make a plan with “shared governance" concept for employee stock ownership, and establishment a corporate culture in which employees and the company have a common cause, interests and destiny. Secondly, government should formulate some policies respectively for the state-owned listed companies and listed non-state, including guidance, tax incentives and relevant laws and regulations for promotion the development of employee-owned. Last but not least, government and companies should maintain the healthy development of capital markets and improve the co-manager market jointly.