| The Employee Stock Ownership Plan(ESOP)is a kind of system which enables employees to own the shares of their companies and to share the profit.China has carried out ESOPs in the 90's,but it was soon halted.In June 2014,ESOPs were allowed again.The market is optimistic about companies that join the plans,however,not all of their stock price went up after the announcement of ESOPs.China is currently short of researches about ESOPs and market reaction,so this study will focus on if investing the companies with ESOPs will obtain higher returns,and what kind of companies will have better market performance.The ultimate purpose is to provide guidance for short-term speculators.At the beginning of this study,descriptive statistical analysis about the implementation characteristics and the distribution of ESOPs in our country are performed.Then the effect of ESOPs on stock price from the system level and the way to carry out is analyzed.And a t-test is conducted for abnormal return to prove that the announcement of ESOPs has significant active influence on stock price.The movement of stock price can be explained by key time points in the system.After that,variance analysis and multiple regression analysis are made to find the characteristics of those companies with high abnormal returns.Based on the findings of this study,we find that the market has significant active reaction towards the announcement of ESOPs.The abnormal returns can be divided into three phases.It will rise during the announcement date and the 60 th trading days.Then it keeps a high level during the 60 th to the 95 th trading days.At last,it begins to decline after the 95 th trading days.The movement pattern of abnormal return has a relationship with the time point of buying stocks.In addition,the abnormal return is higher when the companies are smaller,perform worse prior to the announcement,have more light assets and larger number of employees joined,and deploy the leverage. |
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