Model Inputs of Employee Stock Options and Corporate Governance
Date Issued
2008
Date
2008
Author(s)
Chiang, Tsung-Che
Abstract
This research focuses on the association between the inputs of model of employee stock options and corporate governance. The sample period is from year 2004 to the third quarter of year 2007. The analysis models adopted in the research is OLS Model.Empirical results suggest what mentioned below. First,this study focus on the association between the inputs of model of employee stock options-risk-free rate and corporate governance. The empirical results are as follows:.The number of inspectors is positively associated with earnings management through controlling the risk free rate with statistical significance..The percentage of shares pledged of directors is positively associated with earnings management through controlling the risk free rate with statistical significance..The degree of divagating between voting rights and cash flow claims is positively associated with earnings management through controlling the risk free rate with statistical significance..The chairman who is also the manager in the company is positively associated with earnings management through controlling the risk free rate with statistical significance..The ratio of the stock held by the institutional shareholders is negatively associated with earnings management through controlling the risk free rate with statistical significance. Second, this study focus on the association between model inputs of employee stock options-volatility and corporate governance. The empirical results are as follows:.The ratio of the stock held by the institutional shareholders is positively associated with earnings management through controlling the volatility with statistical significance..The chairman who is also the manager in the company is positively associated with earnings management through controlling the volatility with statistical significance..The percentage of the board of directors controlled by controlling shareholders is negatively associated with earnings management through controlling the volatility with statistical significance..The cash flow claims is negatively associated with earnings management through controlling the volatility with statistical significance. Finally, the empirical results mean that when a company with good corporate governance ,it is seldom to do earnings management through controlling the inputs of the model of employee stock options.
Subjects
corporate governance
employee stock option
earnings management
risk-free rate
volatility
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