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Asian Review of Financial Research Vol.15 No.2 pp.1-42
Market Response on Stock Options and Firm Characteristics
Chang-Soo Kim Yonsei University
Key Words : 스톡옵션,공시효과,기업특성,사건일집중,대리인비용


This paper investigates the relationship between firm characteristics and the capital market response to the introduction of stock options. The capital market responds positively to the announcement of adopting stock options. However, the positive response is significant only over the period of clustered announcement dates. In addition, the announcement effect of manufacturing firms is significantly positive, while that of financial companies is negative For manufacturing firms, the announcement effect has a positive relationship with the growth potential and capital efficiency and a negative relationship with the size, liquidity, labor costs and leverage. Thus, the smaller growing firms with liquidity constraints and low leverage adopt stock options to get over the agency problem and compensate a relatively low salary of their employees. However, the variables for chaebol affiliation and the stock price volatility are not significant. The results for financial firms are almost identical except for the positive coefficient of liquidy variable.
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