Corporate Endowment Insurance Fee Reduction and Employee Wages: Evidence from China

Zhang, Xufei; Fang, Hongsheng; Guo, Lin

doi:10.1111/cwe.12472

Cited by 6 publications

(6 citation statements)

References 24 publications

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“…The underlying rationale is that the potential for future cash and/or stock bonuses motivates employees to work harder and more effi ciently (Kumbhakar and Dunbar, 1993;Jones and Kato, 1995;Cin and Smith, 2002). The plans also serve as supplements to employee compensation, helping to alleviate confl icts of interest arising from wage disparities (Kim and Ouimet, 2014;Zhang et al, 2023). As a result, the implementation of employee ownership often elicits positive market reactions (Beatty, 1995).…”

Section: Literature Review and Hypothesis Development 1 Employee Stoc...mentioning

confidence: 99%

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Employee Stock Ownership Plans and Stock‐price Informativeness

Zuo,

Huang,

Liu

et al. 2024

China and World Economy

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This study examines the impact of employee stock ownership plans (ESOPs) on stock‐price informativeness in Chinese stock markets. Its findings indicate that firms implementing ESOPs experienced an average 11.89 percent increase in stock‐price informativeness. The plans improved stock‐price informativeness through increased external attention and supervision. An event study shows that ESOPs gave rise to an announcement effect, driven by anticipated performance improvements and the novelty associated with ESOPs. A mechanism analysis demonstrates that the implementation of ESOPs attracted market attention, and the increased market supervision resulting from this mitigated the moral hazards of management associated with ESOPs. Plans with more positive signals exerted a greater influence. Notably, ESOPs that prioritized management incentives gained more recognition in the market. As the incentive effects of ESOPs were weaker than those of equity incentive plans and the ESOPs lost novelty over time, the annual announcement effect diminished gradually. These findings underscore the necessity of strengthening ESOP incentives for continued optimization of price efficiency.

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Section: Literature Review and Hypothesis Development 1 Employee Stoc...mentioning

confidence: 99%

“…The participation of management in ESOPs itself also serves as a positive signal (Ding and Zhou, 2021;Zhang et al, 2023). In comparison with internal employees, external investors often rely on the behavior of corporate management to assess corporate value (Tran et al, 2023).…”

Section: Stock-price Informativenessmentioning

confidence: 99%

Employee Stock Ownership Plans and Stock‐price Informativeness

Zuo,

Huang,

Liu

et al. 2024

China and World Economy

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“…Initially, a primary rationale behind enterprises failing to meet the responsibility of furnishing employees with social insurance lies in financial considerations. Social insurance premiums constitute a substantial fraction of an enterprise’s labor-related expenditures, and an elevated contribution rate for old-age insurance further magnify the social security payment burden of Chinese enterprises ( 44 ). Subsequently, viewed through the lens of regional disparities, the developmental status of the region wherein the enterprise is situated emerges as a pivotal indicator of the local economic milieu and the potency of governmental oversight.…”

Section: Literature Review and Theoretical Hypothesesmentioning

confidence: 99%

Comply or evade: factors influencing private enterprises’ basic old-age insurance responsibilities

Xu,

Ma,

Peng

et al. 2024

Front. Public Health

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IntroductionPrivate enterprises are playing an increasingly important role in production and employment in China. However, due to less regulation and a stronger profit motivation than state-owned enterprises with more standardized management, a considerable portion of these private enterprises fall short of fulfilling their basic responsibilities for government-mandated old-age insurance.MethodsThis study establishes a comprehensive research framework aimed at delving into the precise factors contributing to the lax adherence of private enterprises to their basic old-age insurance obligations. This framework takes into account a range of factors, including enterprise profitability, the external environmental context (specifically the level of regional development), and internal organizational dynamics (such as the presence of labor unions and workers’ congresses). To validate this framework, empirical data from a substantial sample of 3,123 private enterprises, which were part of the 10th Chinese Private Enterprise Survey (CPES), were utilized. This study employs the stepwise multiple regression analysis and conducts robustness tests to ensure the model’s effectiveness.ResultsEnterprise profitability, regional development levels, and the existence of labor unions all wield a positive influence on basic old-age insurance coverage that private enterprises extend to their workforce. Moreover, an intriguing aspect emerges: the developmental stage of the region, as well as the presence of labor unions exercise a negative moderating effect on the relationship between enterprise profitability and the coverage rate of basic old-age insurance. In essence, this implies that the basic old-age insurance coverage rate for private enterprises operating in well-developed regions and those with established labor unions is relatively insulated from fluctuations in profitability.DiscussionTo increase the participation rate of private enterprises’ basic old-age insurance, it is important to improve the overall development environment for private enterprises, enhance internal organizational mechanisms, and strengthen regulatory oversight of enterprises in various regions.

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“…However, the earliertreated fi rms have been aff ected by the policy, and thus they are no longer a good control group. To test the validity of our TWFE-DID estimator, followingZhang et al (2023), we conducted the decomposition analysis proposed by Goodman-Bacon (2021), and the estimated results are shown in Table…”

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confidence: 99%

Tax Incentives and Maturity Mismatch between Investment and Financing: Evidence from China

Feng

Zhao

2023

China and World Economy

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This paper examines the effects of China's accelerated depreciation policy (ADP) on the maturity mismatch between investment and fi nancing. Using panel data for China'sA-share nonfinancial listed companies from 2010 to 2019 and a staggered differencein-differences approach, we found the following. First, ADP significantly aggravated the degree of corporate maturity mismatch, and this result was robust across multiple checks. Second, due to an insufficient long-term loan supply, firms had to finance the fi xed investments induced by ADP with short-term debts, leading to maturity mismatches.Third, the positive policy effects were mainly significant for firms with high policy exposure, high-risk preferences, a high degree of information asymmetry, and fi rms with weak long-term financing capacity. Finally, maturity mismatch exacerbated corporate fi nancial risks. Our research fi ndings indicate that passive maturity mismatch is prevalent among Chinese companies and emphasize the need to address financial repression in order to mitigate the potential fi nancial risks that may arise from tax incentives.

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Corporate Endowment Insurance Fee Reduction and Employee Wages: Evidence from China

Cited by 6 publications

References 24 publications

Employee Stock Ownership Plans and Stock‐price Informativeness

Employee Stock Ownership Plans and Stock‐price Informativeness

Comply or evade: factors influencing private enterprises’ basic old-age insurance responsibilities

Tax Incentives and Maturity Mismatch between Investment and Financing: Evidence from China

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