Employee Stock Options and Business Performance---Applying a Counterfactual Framework
Resource
經濟論文叢刊, 39(3), 325-372
Journal
經濟論文叢刊
Journal Volume
39
Journal Issue
3
Pages
325-372
Date Issued
2011-09
Date
2011-09
Author(s)
Chang, Y.
Shen, C.H.
Lee, C.C.
Abstract
This paper fills a gap in the empirical literature which examines the impact of Employee Stock Options (ESO) on financial performance by considering and correcting for sample selection bias due to non-random sampling. Based on data from TWSE-listing hi-tech companies, we employ several propensity score matching method, developed by Rubin (1973), Rosenbaum and Rubin (1983, 1985a,b), construct samples of ESO-firms and after-matching non-ESO-firms (counterfactual samples, without adopting ESO but sharing similar characteristics with ESO-firms) and then use regression analysis to examine their performance differences during 2005--2008. Our empirical results suggest that there is little evidence that ESO-firms outperform Non-ESO-firms. On the contrary, cash bonuses exert large and significantly positive effects on most performance measures in the regression results. Thus, we conclude that adopting ESO alone cannot improve financial performance.
Subjects
員工認股選擇權(ESO), 傾向分數配對方法(Propensity Score Matching Method), 反事實樣本(Counterfactual Sample), 選擇偏誤(Selection Bias)
Type
journal article
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