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JOURNAL OF APPLIED BUSINESS AND ECONOMICS
What Drives Employee Stock Options Programs? Safeguarding Human
Capital and Recruiting Wanted Skills
Author(s): Yu Peng Lin
Citation: Yu Peng Lin, (2013) "What Drives Employee Stock Options Programs? Safeguarding Human
Capital and Recruiting Wanted Skills," Journal of Applied Business and Economics, Vol. 14, Iss. 3, pp. 53-69
Article Type: Research paper
Publisher: North American Business Press
Abstract:
We believe that the investments in firm-specific human capital are at risk from employee turnovers and
that a firm’s productivity is improved when capital and skill are better matched. We extend the attraction
and retention justifications associated with employee stock options programs by hypothesizing that such
programs are used more often by firms that invest in employee training and new physical capital. Our
hypotheses are largely borne out in our panel of 219 U.S. firms between 1990 and 1999. The empirical
results support a positive association between the likelihood of employee stock option programs adoption
and investments in employee training and physical capital.
