Effect Of Employee Stock Ownership Structure On Company Value

June 2014 China Securities Regulatory Commission issued "Guidance on Listed Companies ESOP pilot",which marks a new round of ESOP practice starts.After that, hundreds of companies have responded.EPOS in China re-entered public eye after it died down since 1998.To quell the controversy around this topic, this paper studies the effect of ESOP on firm value from the perspective of the employee stock ownership structure,using the proportion employees share the total capital,the total number of employees shareholding proportion and managerial ownership to measure Employee Stock Ownership Structure in different companies.Furthermore,this paper divided the samples into short-term and long-term data for empirical research.For short-term samples,this paper chose above-mentioned three indexes of companies which released relevant drafts after June 2014 in stock markets of Shanghai and Shenzhen.Before regression analysis,this paper used the method of event study to discuss how the issuance affect stock price.For long-term samples,this paper chose data from companies listed in stock markets of Shanghai and Shenzhenin in 1997 which implement ESOP or executive ownership plan.Then this paper studied how ESOP and executive ownership plan affect corporate performance in 2007.Then,this paper chose data from2009 to 2014 from companies listed in stock markets of Shanghai and Shenzhen during 1998 to 2005.The dependent variable in short-term and long-term samples are CAR and industry-adjusted EPS.The empirical results show that after the release of EPOS draft, relevant company's share price has increased significantly in short-term.But in addition to the proportion of employee stock ownership has a positive impact on stock prices,the impact of other two ratios on corporate value in the short term did not show up.In long term study,the proportion of employee stock ownership has a negative impact on the enterprise value;the proportion of managerial ownership have a significant impact on the enterprise value of a significant positive impact.On this basis, this paper gives advice to firm and society respectively.To some extent, firms should increase the proportion of managerial ownership.Besides,our society and government should perfect system construction in legal aspects.