• Essays on Microeconometrics and Business Economics

      Webber, Douglas (Douglas A.); Maclean, Johanna Catherine; Swanson, Charles E. (Temple University. Libraries, 2021)
      The dissertation consists of three chapters that employ applied econometric techniques to analyze employee benefits related questions. In the first chapter I study the impact of the employee stock ownership plan (ESOP) for 122 companies traded on the U.S. stock market with the quantile regression model. In the second chapter I conduct a policy evaluation of Iowa’s new ESOP bill. For the last chapter I study the ESOP effect on all American publicly traded companies and make the scenario analysis based on the estimation results. Chapter I: In this chapter, I investigate the impact of employee stock ownership plan on corporate finance for American firms traded on the stock market. To study the non-uniform ESOP effect on 122 companies from 2007 to 2016, I employ the quantile regression approach. The results firstly support my assumption that the ESOP has the non-uniform positive effect on business performance across different quantile levels. Secondly, the effect of ESOPs is comparable to corporate life cycle theory. For most start-up firms, an ESOP is a powerful tool to save cash flow and this positive effect drops sharply when a firm stepping into the expansion stage. What is more, different industry properties play a significant role when considering an ESOP adoption. Chapter II: In this chapter, I assess the impact of Iowa’s new ESOP policy on companies that already established an ESOP plan. The study uses the data of 871 companies in total from 2004 to 2015, and all firms included in the dataset have already set up a plan before 2004. To conduct the evaluation, I employ a two-step estimation: propensity score matching method resamples the data and quantile difference-in difference model examines the policy influence across various company size. The findings show that the new bill impacts small business and large scale firms in an opposite direction. Moreover, I decompose the vast differences in plan assets between leveraged and non-leveraged plans and find that the coefficients account for the large variation significantly across all higher quantile levels. Chapter III: In this chapter, I revisit the ESOP effect on financial performance of all American publicly-traded companies on the stock market. The data set contains 621 firms during a six-year time period. To study the plan effect, I use both estimation-based method and simulation-based estimation. Combining those estimation results, I find that the employee ownership plan has a significant positive effect on firm’s financial performance from specific estimation approach, and the leverage property is one of the most valuable function of the ESOP program. Based on the estimation, I make the scenario analysis to provide a detailed guide for firms who are considering the adoption of an ESOP.