@article{ART002358218},
author={Zheng-Wei Yang and Kim， Sung-Hwan},
title={The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China},
journal={Journal of Asia-Pacific Studies},
issn={1225-8539},
year={2018},
volume={25},
number={2},
pages={105-129},
doi={10.18107/japs.2018.25.2.005}
TY - JOUR
AU - Zheng-Wei Yang
AU - Kim， Sung-Hwan
TI - The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China
JO - Journal of Asia-Pacific Studies
PY - 2018
VL - 25
IS - 2
PB - Institute of Global Affairs
SP - 105
EP - 129
SN - 1225-8539
AB - This paper studies the market effects of stock option compensation on firm values in China. Using the combined 240 firm data of RESSET and GTA databases from 2006 till 2014, we perform empirical tests whether stock options play a role as incentive and compensation schemes for executives and employees with expertise and technology in a way reduce the agency cost between agencies like executives and employees. We perform the empirical tests for 40 trading days around the announcement day.
The main test results are summarized as follows. First, the empirical test results show a higher abnormal returns and cumulative abnormal returns around the announcement date. Second, the amount of stock option, both executive option and core-technology option, do not have any statistically significant effect on short-run CARs. Third, the dispersion of stock option, both executive option and core-technology option, measured by the ratios of numbers of option recipients to total employees, has a statistically significant positive effect on one-year HPRs (holding period returns).
The results with respect to the announcement effects are basically same as those of the prior studies while the long-run effects of stock options are contradictory to the prior studies that report positive effects of stock options. Our results also support some of prior studies which the positive effect of wide dispersion of stock option endowment contributes on stock market returns.
KW - Executive Stock Options;Employee Stock Options;Stock Returns;Compensation;China
DO - 10.18107/japs.2018.25.2.005
ER -
Zheng-Wei Yang and Kim， Sung-Hwan. (2018). The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China. Journal of Asia-Pacific Studies, 25(2), 105-129.
Zheng-Wei Yang and Kim， Sung-Hwan. 2018, "The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China", Journal of Asia-Pacific Studies, vol.25, no.2 pp.105-129. Available from: doi:10.18107/japs.2018.25.2.005
Zheng-Wei Yang, Kim， Sung-Hwan "The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China" Journal of Asia-Pacific Studies 25.2 pp.105-129 (2018) : 105.
Zheng-Wei Yang, Kim， Sung-Hwan. The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China. 2018; 25(2), 105-129. Available from: doi:10.18107/japs.2018.25.2.005
Zheng-Wei Yang and Kim， Sung-Hwan. "The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China" Journal of Asia-Pacific Studies 25, no.2 (2018) : 105-129.doi: 10.18107/japs.2018.25.2.005
Zheng-Wei Yang; Kim， Sung-Hwan. The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China. Journal of Asia-Pacific Studies, 25(2), 105-129. doi: 10.18107/japs.2018.25.2.005
Zheng-Wei Yang; Kim， Sung-Hwan. The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China. Journal of Asia-Pacific Studies. 2018; 25(2) 105-129. doi: 10.18107/japs.2018.25.2.005
Zheng-Wei Yang, Kim， Sung-Hwan. The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China. 2018; 25(2), 105-129. Available from: doi:10.18107/japs.2018.25.2.005
Zheng-Wei Yang and Kim， Sung-Hwan. "The Effects of Executive Stock Option and Employee Stock Option on the Stock Returns in China" Journal of Asia-Pacific Studies 25, no.2 (2018) : 105-129.doi: 10.18107/japs.2018.25.2.005
