Broad-based Employee Stock Options in US 'New Economy' Firms

This paper compares the performance of 229 ‘New Economy’ firms offering broad‐based stock options to that of their non‐stock option counterparts. A simple comparison of these firms reveals that the former have higher shareholder returns, Tobin’s q and new knowledge generation. Multivariate analysis...

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Bibliographic Details
Published in:British journal of industrial relations 2002-06, Vol.40 (2), p.273-294
Main Authors: Sesil, James C., Kroumova, Maya K., Blasi, Joseph R., Kruse, Douglas L.
Format: Article
Language:English
Subjects:
Comparative analysis
Economic performance
Employee stock ownership plans
Employees
Enterprises
ESOP
Financial performance
Labour relations
Options on stocks
R&D
Research & development
Stock options
Studies
U.S.A
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Summary:This paper compares the performance of 229 ‘New Economy’ firms offering broad‐based stock options to that of their non‐stock option counterparts. A simple comparison of these firms reveals that the former have higher shareholder returns, Tobin’s q and new knowledge generation. Multivariate analysis using panel data also suggests that the adoption of a stock option plan results in higher levels of value added per employee. However, we do not find evidence that these plans result in superior growth in Tobin’s q or new knowledge generation.
ISSN:0007-1080
1467-8543
DOI:10.1111/1467-8543.00232