Can employee stock ownership plans reduce corporate financialization? Evidence from China

Corporate tax avoidance and corporate financialization: The moderating effect of managerial myopia

“…The mean value of CTA is −0.0007, which is comparable with previous studies. In terms of the control variables, the mean values of Size, Lev, ROA, MOC, Board, Dual, IDR, SOE, Top, Cash, and Back are 22.129, 0.4062, 0.0553, 0.6204, 8.6746, 0.2663, 0.3737, 0.3789, 0.3597, 0.0529, and 0.0496, respectively, which are also consistent with the descriptive results of previous studies (Feng et al, 2021), indicating that our samples are financially stable. Additionally, the mean value of RDE is 0.3412 with a standard deviation of 0.4741, showing that the sample firms on average have 34.12% proportion of R&D expenditures decreased compared with the last period.…”

“…Meanwhile, the coefficient of CTA ( β 1 = 0.0799, t = 4.7354) is statistically significant positive with p value less than 1%, indicating a high level of corporate tax avoidance increases corporate financialization. Furthermore, following Richardson et al (2014), Feng et al (2021), and Jin (2021), we also report a regression results without lagging period of all variables, which are presented in column (4) of Table 3. The estimated coefficient on CTA is 0.0610, which is also significant at the 1% level.…”

“…Our study aims to examine the influence of corporate tax avoidance on corporate financialization and the moderating effect of managerial myopia. Following Hanlon and Heitzman (2010), Shams et al (2021), and Feng et al (2021), we construct the following ordinary least squares model. where Fin denotes the proxy variable for corporate financialization, which is calculated by the ratio of financial assets to total assets.…”

Employee stock ownership plans and firm productivity in China

“…When a firm adopts an ESOP, both executives and non-executives are potentially included in the plan and are then motivated to work. However, the shareholding proportion of executives and non-executives may lead to differences in the impact of ESOPs on firm performance (Feng et al, 2022). Previous studies have maintained that the rank-and-file (namely non-executive) employees should not be marginalised, and that non-executive ownership plays an important role in mitigating agency conflicts and curbing managerial risk-taking (Faleye et al, 2006; Chen et al, 2020).…”

“…We focus on the role of ESOPs in this field, in order to provide new ideas on how to improve the productivity of Chinese enterprises. Third, this paper contributes to the current literature on Chinese ESOPs (Feng et al, 2022;Ren et al, 2019). Since China now officially allows listed firms to adopt ESOPs, a growing number of Chinese firms are motivating employees through such plans, though the literature on Chinese ESOPs is scarce.…”