The causal effect of option ownership on employee performance: Empirical evidence from personnel data

Qiaoqiao Li and Hong Zhang

Labour Economics, 2021, vol. 69, issue C

Abstract: We use personnel data from a Chinese firm to explore the incentive effect of employee options on performance. To obtain the causal effect, the difference-in-differences method is used based upon a data set of employees nominated for option ownership. Comparing employees who were granted options with those who had only been nominated, we find that the impact of option ownership on employees’ performance is insignificant and results are robust across the board. Moreover, a heterogeneity analysis indicates that the incentive effect exists for employees at high job levels but remains insignificant for workers at low job levels; there is no difference in effect across genders or between high and low education; in addition, whether employees had plans to exercise their options has no impact on the incentive effect.

Keywords: Employee options; Incentive; DID; Internal labor market (search for similar items in EconPapers)
JEL-codes: J24 M11 M52 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:69:y:2021:i:c:s0927537121000014

DOI: 10.1016/j.labeco.2021.101966

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