This paper examines whether the announcement of an employee stock ownership plan(ESOP)affects stock price crash risk and the mechanism by which the ESOP may influence crash risk,using a sample of Chinese A-share firms from the period 2014 to 2017.We provide evidenee that an ESOP announcement is significantly and negatively related to a firm's stock price crash risk.An ESOP announcement sends positive signals to the market that insiders are optimistic about a firmzs future value,which helps enhance investor confidence,resist the pressure for a fire sale caused by negative information disclosure,and reduce stock price crash risk.Further research shows that larger-scale,lower-priced and non-leveraged ESOPs are more helpful in reducing crash risk.This paper sheds lights on the impact of ESOPs in a volatile market environ merit.It also contributes to firms' implementatio n of ESOPs and the development of the legal system in capital markets.
This study investigates the effect of voluntary disclosures on lending decisions in the repeated game.Using a unique dataset from a peer-to-peer lending platform,"ppdai" (poipaidai),we document that voluntary disclosures in the repeated game play a stronger role in promoting funding success than those in the one-shot game.We argue that voluntary disclosures improve the bidding activity in the repeated game through which they increase funding success.In addition,the greater impact of voluntary disclosures on funding success in the repeated game only holds for loans without a personal guarantee attribution.Our extended results suggest that the subjective voluntary disclosures in the repeated game have greater information content only when borrowers have a successful borrowing experience.We also point out that voluntary disclosures in the repeated game are associated with a lower probability of default.Our results are robust to the Heckman two-step estimation that addresses the self-selection effect and a specification designed to rule out the alternative explanation from reputation in the repeated game.Our study provides new insights into the real effects of costless,voluntary and unverifiable disclosures on lending decisions.
