Assessing the impact of the employee stock ownership plan using the Difference-in-Differences method


  • Luu Thu Quang Ho Chi Minh University of Banking


ESOPs, firm performance, ROA, ROE, DID


This study employs the Difference-in-Differences (DID) method to analyze the impact of the Employee Stock Ownership Plans (ESOPs) in the Vietnamese stock market using data collected from annual reports of listed companies in the period 2009-2019. Our findings indicate a significant improvement in Return on Assets (ROA) and Return on Equity (ROE) in the three years following ESOP implementation compared to the preceding three years. Companies adopting ESOPs have demonstrated better operating efficiency than those that do not. ESOPs show optimum effectiveness when they are issued to 10% or more of total employees. However, there is no definitive evidence linking ESOP issuance rate directly to overall firm performance. Based on these results, we recommend that CEOs and shareholders consider implementing ESOPs broadly among employees to maximize business performance rather than restricting them to a small management group.


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Luu Thu Quang. (2024). Assessing the impact of the employee stock ownership plan using the Difference-in-Differences method. VNU JOURNAL OF ECONOMICS AND BUSINESS, 4(3), 63.



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