Effects of Option Incentive Compensation on Corporate Innovation: The Case of China
Date
Authors
Cheng, R
Frijns, B
Kim, H
Ryu, D
Supervisor
Item type
Journal Article
Degree name
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier BV
Abstract
This study examines the effect of option incentives on corporate innovation in a representative emerging and transitioning economy. Using data from China, we show that option incentives have significant positive impacts on two crucial aspects of innovation: inputs and outputs. Innovation efficiency consistently improves after the introduction of option incentives. These positive effects remain when we control for potential endogeneity using difference-in-differences estimation with propensity score matching. Option incentives have more pronounced effects in high-tech firms than in other firms. Our findings suggest that firms’ specific characteristics and needs should be considered when developing incentive policies.Description
Keywords
3501 Accounting, Auditing and Accountability, 3502 Banking, Finance and Investment, 35 Commerce, Management, Tourism and Services, 3507 Strategy, Management and Organisational Behaviour, 9 Industry, Innovation and Infrastructure, 1402 Applied Economics, 1403 Econometrics, 1503 Business and Management, Economics, 3502 Banking, finance and investment, 3801 Applied economics
Source
Economic Systems, ISSN: 0939-3625 (Print), Elsevier BV, 48(1), 101171-101171. doi: 10.1016/j.ecosys.2023.101171
Publisher's version
Rights statement
This is the Author's Accepted Manuscript version of an article published in Economic Systems © 2023 Elsevier B.V. The Version of Record is available at DOI: 10.1016/j.ecosys.2023.101171