Does employee stock ownership program reduce a company’s stock volatility during the Covid-19 lockdown?

Phan Huy Hieu Tran

Journal of Behavioral and Experimental Finance, 2021, vol. 32, issue C

Abstract: We examine whether the ESOP (employee stock ownership program) has a significant effect on a company’s stock volatility during the Covid-19 lockdown. We find that although banks’ stock prices were more volatile in response to the rise of covid-19 confirmed cases, banks with ESOP showed significantly lower volatility than banks without ESOP. To identify the causal effect of the ESOP implementation, we use the ESOP-culture-index of each country as an instrumental variable.

Keywords: COVID-19; ESOP; Employee ownership; Stock volatility (search for similar items in EconPapers)
JEL-codes: G14 G21 G41 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:32:y:2021:i:c:s2214635021001027

DOI: 10.1016/j.jbef.2021.100558

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