Do Employee Stock Ownership Plan Spur Corporate Innovation?

“Innovation boosts productivity;it makes companies competitive and countries strong”.Enterprises occupy the main position in innovation,and corporate innovation is realized by employees.To stimulate employees’ innovation vitality and release employees’ creativity is the key to improve the innovation ability of enterprises.To stimulate employees’ innovation vitality and release employees’ creativity is the key to improve the innovation ability of enterprises.As a long-term incentive system,employee stock ownership plan(ESOP)originated in the United States,and then it is widely used in the world.However,the development of ESOP in China is not smooth.On June 20,2014,the CSRC of the State Council formulated and promulgated the guiding opinions on the pilot implementation of ESOP in listed companies.After 11 years,the ESOP was restarted and started the formal implementation of the regulations.After that,many listed companies have tried ESOP,which has become a new development climax of ESOP.Therefore,it is of great significance to study the implementation effect of ESOP in the new era.Based on the theory of two factors,principal-agent,human capital and social comparison,this paper reviews the latest research on ESOP at home and abroad in recent years,and studies the impact of ESOP and its characteristics on enterprise innovation.In this paper,the number of patent applications is used to measure corporate innovation based on the sample of listed companies that passed the board of directors’ plan in 2014-2017 and finally successfully implemented the ESOP.After empirical analysis and test,this paper believes that: the implementation of ESOP can promote enterprise innovation.From the perspective of the characteristics of ESOP,it is found that:(1)the higher the ESOP’s shareholding ratio is,the more significant the incentive effect is,and the higher the company’s technological innovation output is;(2)the wider the ESOP’s shareholding range is,the free-rider problem can not be ignored,which weakens the incentive effect on enterprise innovation;(3)the higher the ESOP’s per capita shareholding ratio is,the higher the company’s innovation output is(4)the employee stock ownership plan with high participation of non executives plays a more significant role in promoting innovation output.Further analysis shows that the difference of property right and employee nature will have different influence on the effect of ESOP.From the perspective of the heterogeneity of enterprise property rights,it is found that the effect of implementing ESOP in state-owned enterprises is not as good as that of private enterprises.The reasonfor the difference is that state-owned enterprises reverse regulate the relationship between ESOP shareholding ratio and enterprise innovation,and between the scope of shareholding and enterprise innovation.That is to say,the social comparison theory is more applicable to the implementation of ESOP in state-owned enterprises,while the tendency of employees in private enterprises is the opposite,which is more applicable to the tournament theory.From the perspective of employee heterogeneity,it is found that when the number of R&D personnel is relatively high,the implementation of ESOP has a more significant role in promoting enterprise innovation.Based on the theoretical and empirical analysis,this paper puts forward the following suggestions from the perspective of ESOP design: first,the setting of shareholding ratio and shareholding range should be different according to the different tendencies of employees in state-owned enterprises and private enterprises.Private enterprises can appropriately expand the shareholding ratio of employee stock ownership plan,pay attention to the range of incentive objects should not be too large,so as to ensure that the per capita shareholding ratio is large enough to avoid the free-rider problem beyond the incentive role,so as to achieve greater degree and scope of interest coordination of employees;state-owned enterprises should pay attention to fairness,they can moderately increase the scope of employee stock ownership plan,and the shareholding ratio should not be too large.Second,improve the participation of non executives to fully mobilize and enhance the enthusiasm and competitiveness of employees.