Research on the Influence of ESOP on Enterprise Value

Jingwen Chang

doi:10.54097/7bwc0n29

Authors

Jingwen Chang

DOI:

https://doi.org/10.54097/7bwc0n29

Keywords:

ESOP; business performance and value; enterprise innovation; share price; negative influence.

Abstract

For the present, more and more enterprises in China have begun to adopted ESOP. Enterprises adopt ESOP because this plan can do motivation to their employees, and the existing literature have done researches and investigations for the encouraging effect, but it's results of influence are both positive and negative, and the influence factors are also multiple, so the conclusions are inconsistent. This article mainly analyzes and researches elements such as its influence mechanism and influence degree from the perspective of the impact of ESOP on enterprise value. Research findings reveal that ESOP positively affects business performance and value, innovation ability and share price, and the effect of influence is impacted by the factors such as nature of the company, background and implementation plan at the same time. Meanwhile, because of some improper purposes, ESOP will also bring negative influence to the enterprises. The research in this article helps the management of enterprises to have a deeper understanding of ESOP and to better understand its influence mechanism on enterprise value, thus bringing certain references for the management when carrying out corporate governance.

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