Effects of employee stock ownership plans on firm performance – evidence from listed commercial banks of Vietnam

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This study presents the effect of employee stock ownership plans on the firm performance of joint stock commercial banks in Vietnam. By using the Cobb-Douglas production function model and regression analysis model, combined with the use of financial statement data and Employee Stock Ownership Plan (ESOP) issuance reports of 18 banks listed on Ho Chi Minh and Hanoi stock exchanges from 2015 to 2019, it is found that ESOP had a positive impact on the performance of banks, but there was a lag of about two years. It can be seen that ESOP issuance has a positive effect on the financial ratios of joint stock commercial banks. Especially, the higher the issuance ratio in accordance to the size of a bank, the better the influence on the indices. Though there are many advantages of ESOP compared to traditional bonus programs, only eight joint stock commercial banks in Vietnam have applied ESOP. Banks in particular and businesses in Vietnam in general need to prepare knowledge and resources to expand and promote the true effectiveness of ESOP. From there, some suggestions and recommendations to make the ESOP program really effective for both employees, banks and shareholders will be given.

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    • Table 1. Commercial joint stock banks listed in Vietnam (time: May 2020)
    • Table 2. Results of the Cobb-Douglas production function model
    • Table 3. Results of running Cobb-Douglas production function model (with lagged variable)
    • Table 4. Regression results with ROA
    • Table 5. ROA regression results (remove TETA variable)
    • Table 6. Regression results with ROE
    • Table 7. ROE regression results (remove TETA variable)
    • Table 8. Regression results with NIM
    • Conceptualization
      Phuong Lan Le, Hoa Thi Thanh Nguyen
    • Data curation
      Phuong Lan Le, Hoa Thi Thanh Nguyen
    • Formal Analysis
      Phuong Lan Le, Hoa Thi Thanh Nguyen
    • Funding acquisition
      Phuong Lan Le
    • Investigation
      Phuong Lan Le
    • Methodology
      Phuong Lan Le, Hoa Thi Thanh Nguyen
    • Project administration
      Phuong Lan Le
    • Resources
      Phuong Lan Le
    • Supervision
      Phuong Lan Le
    • Writing – original draft
      Phuong Lan Le, Hoa Thi Thanh Nguyen
    • Writing – review & editing
      Phuong Lan Le
    • Validation
      Hoa Thi Thanh Nguyen
    • Visualization
      Hoa Thi Thanh Nguyen