This study aims to empirically analyze the productivity effects of employee stock ownership plans (ESOPs) using a sample of 104 listed firms during the 1989–1998 period. Using a Cobb-Douglas function with per-employee value added as the dependent variable as the base model, this study examines the productivity enhancement effects of ESOP adoption and ESOP duration, as well as how other characteristics of ESOPs affect the productivity effects of the system. The empirical results of this study show that the productivity enhancement effect of ESOP adoption is generally positive and significant. The duration of ESOP implementation has a positive effect on both the increase in amount and the rate of increase in per-employee value added. The ESOP adoption dummy variable, while not significant for the increase in amount of per-employee value added, has a positive effect on its rate of increase. In particular, per-employee value added increases nonlinearly with the duration of ESOP implementation, with productivity being maximized at the seventh year—the point at which the mandatory holding period is released—and gradually declining thereafter. Simultaneously, the results show that increases in stock returns enhance the productivity improvement effects of ESOP adoption and duration as measured by both the increase in amount and rate of increase in per-employee value added. Finally, this study demonstrates that the 1993 reduction in the mandatory holding period for employee-owned shares did not significantly affect the per-employee value added enhancement effect of ESOP adoption, but did enhance the effect of ESOP duration on per-employee value added output.