Timing And Market Effects Analysis Of Employee Stock Ownership Plan

With the development of economy and society,human capital is becoming more and more important.Employee stock ownership plan,a kind of incentive and benefit compensation mechanism has been applied to practice.In June 2014,the SFC issued guidance,and enables listed company conduct employee stock ownership plan.Since then,employee stock ownership plan gets rapid development.This article chooses employee stock ownership plan of listed companies announced between June 2014 and December 2015 as the research object,and uses the event study method to study the timing and market effect of the listed company's employee stock ownership plan.And the research objects are to explore whether listed companies use information advantage to have timing behavior and to explore the market reaction to listed companies' the employee stock ownership plan.This article is one of the earliest to study this field of our country,and the classification method used in the study of the timing behavior can provide reference for other scholars.The research results show that there are significantly positive excess returns on the ESOP notice date and the day before ESOP notice date,which indicates that the announcement of employee stock ownership plan of listed companies in China has positive market effect and there is a phenomenon of news leaked in advance.At the same time,for non-public way there are significant negative excess returns before the draft announcement day and significant positive excess returns after the announcement day,which shows that listed companies have timing behavior to employee stock ownership plan announcement;for the way of buying from secondary market,there are significant negative excess returns before complete purchase announcement date and significant positive excess returns after complete purchase announcement date,which shows that listed companies have timing behavior to employee stock ownership plan stock purchase.Therefore,this paper argues that listed companies tend to have timing behavior to employee stock ownership plan,and the market reaction to listed companies' employee stock ownership plan announcement tend to be positive.