TY - JOUR
T1 - The effects of employee stock ownership on stock liquidity
T2 - Evidence from the Korean market
AU - Jung, Hail
AU - Choi, Sanghak
N1 - Publisher Copyright:
© 2021 Elsevier Inc.
PY - 2021/11
Y1 - 2021/11
N2 - This study investigates the relationship between the level of employee stock ownership (ESO) and stock liquidity. Using Korean ESO data, we find that ESO is positively associated with various liquidity measures. Stock-owning employees tend to mitigate information asymmetry to increase their benefits from the transparent market. We also find stronger effects when the firm is not an affiliate of a chaebol family group, and is less monitored by financial analysts, foreign investors, and outside directors. Furthermore, we employ various robustness tests to mitigate potential endogeneity concerns.
AB - This study investigates the relationship between the level of employee stock ownership (ESO) and stock liquidity. Using Korean ESO data, we find that ESO is positively associated with various liquidity measures. Stock-owning employees tend to mitigate information asymmetry to increase their benefits from the transparent market. We also find stronger effects when the firm is not an affiliate of a chaebol family group, and is less monitored by financial analysts, foreign investors, and outside directors. Furthermore, we employ various robustness tests to mitigate potential endogeneity concerns.
KW - Corporate transparency
KW - Employee stock ownership
KW - Managerial misbehavior
KW - Stock market liquidity
UR - http://www.scopus.com/inward/record.url?scp=85107024863&partnerID=8YFLogxK
U2 - 10.1016/j.najef.2021.101468
DO - 10.1016/j.najef.2021.101468
M3 - Article
AN - SCOPUS:85107024863
SN - 1062-9408
VL - 58
JO - North American Journal of Economics and Finance
JF - North American Journal of Economics and Finance
M1 - 101468
ER -