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The impact of CEO long-term equity-based compensation incentives on economic growth in collectivist versus individualist countries

Campbell, Cynthia J.; Chang, Rosita P.; Dejong, Jack C.; Doktor, Robert; Oxelheim, Lars LU and Randøy, Trond (2016) In Asian Economic Papers 15(2). p.109-133
Abstract

This study examines the impact of the prevalence of long-term equity-based chief executive officer (CEO) compensation incentives on GDP growth, and we address the moderating role of individualist versus collectivist cultures on this relationship. We argue that long-term incentives given to CEOs in some firms may convey to other CEOs that they too may be able to receive such incentives and rewards if they emulate the incentivized and rewarded CEOs. In a longitudinal study across 22 nations over a 5-year period, we find that the higher proportion of CEOs in a country are awarded long-term equity-based incentive compensation, the greater future real GDP growth, particularly in collectivist countries.

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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Asian Economic Papers
volume
15
issue
2
pages
25 pages
publisher
MIT Press
external identifiers
  • scopus:84971321466
  • wos:000376741000010
ISSN
1535-3516
DOI
10.1162/ASEP_a_00432
language
English
LU publication?
yes
id
2b6eba28-1a13-4259-a3e4-8a7a9130e082
date added to LUP
2017-01-26 09:45:26
date last changed
2017-09-18 11:34:13
@article{2b6eba28-1a13-4259-a3e4-8a7a9130e082,
  abstract     = {<p>This study examines the impact of the prevalence of long-term equity-based chief executive officer (CEO) compensation incentives on GDP growth, and we address the moderating role of individualist versus collectivist cultures on this relationship. We argue that long-term incentives given to CEOs in some firms may convey to other CEOs that they too may be able to receive such incentives and rewards if they emulate the incentivized and rewarded CEOs. In a longitudinal study across 22 nations over a 5-year period, we find that the higher proportion of CEOs in a country are awarded long-term equity-based incentive compensation, the greater future real GDP growth, particularly in collectivist countries.</p>},
  author       = {Campbell, Cynthia J. and Chang, Rosita P. and Dejong, Jack C. and Doktor, Robert and Oxelheim, Lars and Randøy, Trond},
  issn         = {1535-3516},
  language     = {eng},
  month        = {06},
  number       = {2},
  pages        = {109--133},
  publisher    = {MIT Press},
  series       = {Asian Economic Papers},
  title        = {The impact of CEO long-term equity-based compensation incentives on economic growth in collectivist versus individualist countries},
  url          = {http://dx.doi.org/10.1162/ASEP_a_00432},
  volume       = {15},
  year         = {2016},
}