IDEAS home Printed from https://ideas.repec.org/a/taf/ufajxx/v52y1996i4p51-61.html
   My bibliography  Save this article

Financial Returns of Public ESOP Companies: Investor Effects vs. Manager Effects

Author

Listed:
  • Michael A. Conte
  • Joseph Blasi
  • Douglas Kruse
  • Rama Jampani

Abstract

The financial returns of public companies that sponsor ESOPs are substantially and significantly higher than those of comparable non-ESOP companies. The returns are systematically different even after adjusting for risk, providing evidence of a positive investor effect. The analysis of pre- and postadoption returns of ESOP-sponsoring companies suggests that the adoption of an ESOP actually reduces financial returns, signifying the presence of a relatively large negative manager effect. These findings are consistent with the idea that most ESOPs in large publicly traded companies are adopted for defensive purposes. Even though ESOP adoption lowers financial returns in large companies and has no significant effect in smaller companies, the presence of an ESOP remains a good signal to buy the sponsor's stock.

Suggested Citation

  • Michael A. Conte & Joseph Blasi & Douglas Kruse & Rama Jampani, 1996. "Financial Returns of Public ESOP Companies: Investor Effects vs. Manager Effects," Financial Analysts Journal, Taylor & Francis Journals, vol. 52(4), pages 51-61, July.
    • Handle: RePEc:taf:ufajxx:v:52:y:1996:i:4:p:51-61
    DOI: 10.2469/faj.v52.n4.2011
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2469/faj.v52.n4.2011
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.2469/faj.v52.n4.2011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ufajxx:v:52:y:1996:i:4:p:51-61. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/ufaj20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.