This paper examines whether the announcement of an employee stock ownership plan(ESOP)affects stock price crash risk and the mechanism by which the ESOP may influence crash risk,using a sample of Chinese A-share firms...This paper examines whether the announcement of an employee stock ownership plan(ESOP)affects stock price crash risk and the mechanism by which the ESOP may influence crash risk,using a sample of Chinese A-share firms from the period 2014 to 2017.We provide evidenee that an ESOP announcement is significantly and negatively related to a firm's stock price crash risk.An ESOP announcement sends positive signals to the market that insiders are optimistic about a firmzs future value,which helps enhance investor confidence,resist the pressure for a fire sale caused by negative information disclosure,and reduce stock price crash risk.Further research shows that larger-scale,lower-priced and non-leveraged ESOPs are more helpful in reducing crash risk.This paper sheds lights on the impact of ESOPs in a volatile market environ merit.It also contributes to firms' implementatio n of ESOPs and the development of the legal system in capital markets.展开更多
基金National Natural Science Foundation of China(No.71272150,and No.71602005)Key Projects of the National Social Science Research Fund of China(No.15AZD012)Humanities and Social Sciences Fund of the Ministry of Education(No.15YJC630164).
文摘This paper examines whether the announcement of an employee stock ownership plan(ESOP)affects stock price crash risk and the mechanism by which the ESOP may influence crash risk,using a sample of Chinese A-share firms from the period 2014 to 2017.We provide evidenee that an ESOP announcement is significantly and negatively related to a firm's stock price crash risk.An ESOP announcement sends positive signals to the market that insiders are optimistic about a firmzs future value,which helps enhance investor confidence,resist the pressure for a fire sale caused by negative information disclosure,and reduce stock price crash risk.Further research shows that larger-scale,lower-priced and non-leveraged ESOPs are more helpful in reducing crash risk.This paper sheds lights on the impact of ESOPs in a volatile market environ merit.It also contributes to firms' implementatio n of ESOPs and the development of the legal system in capital markets.
