Do Employee Stock Ownership Plans Affect the Cost of Equity Capital:Based on the Model Testing of Multi-period Difference-in-Difference
Taking the implementation of employee stock ownership plans as a quasi-natural ex-periment and using the listed companies in Chinese Shanghai and Shenzhen A-share from 2011 to 2022 as research samples,a multi-period difference-in-difference model is constructed to em-pirically test the impact of the implementation of employee stock ownership plans on the cost of equity capital.The research demonstrates that the implementation of employee stock owner-ship plans can significantly reduce the cost of equity capital,which remains true after a series of endogenous and robust tests such as parallel trend test and placebo test.The mediating effect test finds that employee stock ownership plans reduce the cost of equity capital by improving the desire to pay cash dividends and the amount paid.Based on the research findings,the fol-lowing policy recommendations are put forward:continuously improving the relevant system design and actively promoting the implementation of employee stock ownership plans;perfec-ting the function of capital market and guiding enterprises to formulate appropriate cash divi-dend policies;improving relevant laws and regulations and strengthening supervision,and im-proving the external financing environment of enterprises.
employee stock ownership planscost of equity capitalcash dividend policy
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