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Employee stock ownership, agency costs and corporate financial information quality

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  • Li, Zongmin

Abstract

This paper systematically examines the impact mechanism and action pathways of Employee Stock Ownership Plans (ESOPs) on the quality of financial information based on data from Chinese A-share listed companies from 2014 to 2023. The study finds that: ESOPs significantly enhance the quality of financial information; ESOPs indirectly reduce earnings management behaviors by lowering agency costs; and in enterprises with a relatively high proportion of shares held by the largest shareholder, the inhibitory effect of ESOPs on earnings management is significantly strengthened.

Suggested Citation

  • Li, Zongmin, 2025. "Employee stock ownership, agency costs and corporate financial information quality," Finance Research Letters, Elsevier, vol. 85(PD).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pd:s1544612325014552
    DOI: 10.1016/j.frl.2025.108200
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    References listed on IDEAS

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