The Impact of CEO Long-term Equity-based Compensation Incentives on Economic Growth in Collectivist versus Individualist Countries

This study examines the impact of the prevalence of long-term equity-based chief executive officer (CEO) compensation incentives on GDP growth, and we address the moderating role of individualist versus collectivist cultures on this relationship. We argue that long-term incentives given to CEOs in s...

Full description

Saved in:
Bibliographic Details
Published in:Asian economic papers 2016-06, Vol.15 (2), p.109-133
Main Authors: Campbell, Cynthia J., Chang, Rosita P., DeJong, Jack C., Doktor, Robert, Oxelheim, Lars, Randøy, Trond
Format: Article
Language:English
Subjects:
Economics
Economics and Business
Ekonomi och näringsliv
Nationalekonomi
Samhällsvetenskap
Social Sciences
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This study examines the impact of the prevalence of long-term equity-based chief executive officer (CEO) compensation incentives on GDP growth, and we address the moderating role of individualist versus collectivist cultures on this relationship. We argue that long-term incentives given to CEOs in some firms may convey to other CEOs that they too may be able to receive such incentives and rewards if they emulate the incentivized and rewarded CEOs. In a longitudinal study across 22 nations over a 5-year period, we find that the higher proportion of CEOs in a country are awarded long-term equity-based incentive compensation, the greater future real GDP growth, particularly in collectivist countries.
ISSN:1535-3516
1536-0083
DOI:10.1162/ASEP_a_00432