Employee Stock Ownership Plans and Corporate Earnings Performance: A Dynamic Perspective Using a Quantile Regression Approach

• Main Authors: Ying-ChianWu, 吳盈蒨
• Other Authors: Ming-Yuan Li
• Format: Others
• Language: en_US
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/51173086411312243275

碩士 === 國立成功大學 === 財務金融研究所 === 98 === This paper re-investigates the effect of Employee Stock Ownership Plans (ESOP) on profitability. Given the extensive research on the topic of ESOP, this paper contributes to the literature in using the quantile regression method (QR method) to better examine the relationship between ESOP and profitability, since prior studies of a variety of forms of employee ownership have yielded inconsistent results with regard to whether firms with these plans have better or worse performance, on average, than firms without them. The QR method has the advantage of tracking the dynamic relationship among variables, and it avoids the weakness of focusing on central behavior given the probability distribution of variable. In this paper, the empirical results show that by using S＆P 500 10-year data since 1998 and using ROE as measuring profitability, taking ESOP has a significantly positive impact on firm performance for companies which are in growth or decline stage. However, if firms already reach its mature stage, the relationship between ESOP and corporate earnings is insignificant. Factors which are likely to influence corporate performance, such as firm size and debt ratio, are taken into account in this work, and the previous results still hold.