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

22 Pages Posted: 6 May 2003  

James C. Sesil

University of Wisconsin - Madison - School of Business

Maya K. Kroumova

New York Institute of Technology

Joseph Blasi

Rutgers School of Management and Labor Relations - New Brunswick

Douglas L. Kruse

Rutgers University

Abstract

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.

Suggested Citation

Sesil, James C. and Kroumova, Maya K. and Blasi, Joseph and Kruse, Douglas L., Broad-based Employee Stock Options in US 'New Economy' Firms. British Journal of Industrial Relations, Vol. 40, pp. 273-294, 2002. Available at SSRN: https://ssrn.com/abstract=313255

James C. Sesil (Contact Author)

University of Wisconsin - Madison - School of Business ( email )

975 University Avenue
Madison, WI 53706
United States

Maya K. Kroumova

New York Institute of Technology ( email )

Kingdom of Bahrain
New York, NY 10023
United States

Joseph R. Blasi

Rutgers School of Management and Labor Relations - New Brunswick ( email )

Piscataway, NJ 08854
United States
732-445-5444 (Phone)
732-445-2830 (Fax)

Douglas L. Kruse

Rutgers University ( email )

Piscataway, NJ 08854
United States
908-445-5991 (Phone)
908-445-2830 (Fax)

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