African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4194

Full Length Research Paper

The economic determinants of firms issuing employee stock options: Evidence from Taiwan

Chin-Yuan Chang1,2* and Yu-Chih Lin2
  1Department of Business Administration, Kao Yuan University, Taiwan. 2National Yunlin University of Science and Technology, Taiwan.
Email: [email protected]

  •  Accepted: 27 September 2010
  •  Published: 30 June 2011

Abstract

 

This paper examines the economic determinants of firms issuing employee stock options (ESOs) for Taiwan listed companies. For the sample of 3,943 firm-year observations over the year 2001 to 2007, probit regression model shows that the companies with higher leverage, higher proportion of independent directors, more investment opportunities, in the “new economy” industries and larger firms tend to issue ESOs. Considering the magnitude of ESO, the results of Tobit model demonstrate that firms with higher leverage has stronger tendency to issue more ESOs. Furthermore, an additional analysis reveals when firms have less free cash flow will tend to choose issuing more ESOs.

 

Key words: Employee stock options, probit, tobit.

Abbreviation

 ESO, Employee stock options; LEV, leverage; FCF, free cash flow.

Copyright © 2024 Author(s) retain the copyright of this article.

This article is published under the terms of the Creative Commons Attribution License 4.0

Back to Vol. 5 No. 11
Back to articles
  • Articles on Google by:
SUBSCRIBE TO RSS
SUBMIT MANUSCRIPT
CONFERENCES