Neighborhood matters: The impact of location on broad based stock option plans

• 成果类型: Article
• 署名作者: Kedia, Simi; Rajgopal, Shiva
• 署名单位: University of Washington; University of Washington Seattle; Rutgers University System; Rutgers University Newark; Rutgers University New Brunswick
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2008.03.004
• 发表日期: 2009
• 页码: 109-127
• 关键词: Geography; Stock options; location; Employee compensation; retention

摘要

We find that fixed effects related to the location of firms' headquarters explain variation in broad based option grants after controlling for industry effects and firm characteristics traditionally known to affect option granting. Location matters because of local labor market conditions and social interaction with neighboring firms. Broad based option grants are higher: (i) when a firm's stock prices co-move more with stock prices of other firms located in that Metropolitan Statistical Area (MSA): (ii) in states that are less likely to enforce non-compete agreements; and (iii) in MSAs where employees prefer options because stocks there experience abnormally high returns. (C) 2009 Elsevier B.V. All rights reserved.