Does employee stock ownership plan have monitoring and incentive effects? --An analysis based on the perspective of corporate risk taking.

This study uses sample data of Chinese A-share listed companies from 2006 to 2022 and employs methods such as propensity score matching (PSM), difference-in-differences (DID), and instrumental variables (IV) to study the supervisory incentive effect of ESOPs from the perspective of corporate risk-taking. The results indicate that ESOPs significantly increase corporate risk-taking. The specific mechanism is that ESOPs reduce the dual agency costs between shareholders and managers, as well as between managers and employees, thereby alleviating corporate financing constraints and enhancing the level of corporate risk-taking.