Beschreibung:
Although companies typically claim to implement an employee ownership stock plan (ESOP) for the purpose of incentivizing employees to enhance corporate performance, many nonincentive motives may be hidden behind this move. This paper demonstrates that due to optimistic market reactions, employee ownership stock plans may be related to covering up corporate fraud. Companies that have already committed fraud but have yet to have this fraud detected have a higher propensity for declaring an ESOP