Employee Stock Options and Investment

• 成果类型: Article
• 署名作者: Babenko, Ilona; Lemmon, Michael; Tserlukevich, Yuri
• 署名单位: Arizona State University; Arizona State University-Tempe; Utah System of Higher Education; University of Utah
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2011.01657.x
• 发表日期: 2011
• 页码: 981-1009
• 关键词: EMPIRICAL-EXAMINATION; FINANCING DECISIONS; convertible bonds; CASH-FLOW; FIRMS; equity; INFORMATION; debt; COMPENSATION; REPURCHASES

摘要

Exercises of employee stock options generate substantial cash inflows to the firm. These cash inflows substitute for costly external finance in those states of the world in which the demand for investment is high. Using the fact that the proceeds from option exercises exhibit a distinct nonlinearity around the point where options fall out of the money, we estimate that firms increase investment by $0.34 for each dollar received from the exercise of stock options. Firms that face higher external financing costs allocate more of the proceeds from option exercises to investment.