The effects of employee stock ownership on stock liquidity: Evidence from the Korean market

Hail Jung and Sanghak Choi

The North American Journal of Economics and Finance, 2021, vol. 58, issue C

Abstract: 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.

Keywords: Employee stock ownership; Corporate transparency; Stock market liquidity; Managerial misbehavior (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:58:y:2021:i:c:s1062940821000917

DOI: 10.1016/j.najef.2021.101468

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