The effects of SFAS-123R on corporate investment
This study examines the effects of mandatory expensing of stock options on corporate investment after the passage of SFAS-123R. First, we find an increase in corporate investment such as R&D investment and capital expenditure in the post-SFAS-123R period. Second, we find that stock-based compensation such as stock option compensation and restricted stock in the post-SFAS-123R period is positively related to investment. Our findings suggest that SFAS-123R discourages the opportunistic use of stock option compensation. The use of option compensation in the post-SFAS-123R era appears to encourage managers to pursue more long-term investment, which suggests that the SFAS-123R has had positive consequences.
This is an Accepted Manuscript of an article published by Taylor & Francis in Applied Economics Letters on 2019-07-22, available online: https://www.tandfonline.com/10.1080/13504851.2019.1646394.
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Work Title | The effects of SFAS-123R on corporate investment |
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License | CC BY-NC 4.0 (Attribution-NonCommercial) |
Work Type | Article |
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Publication Date | July 22, 2019 |
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Deposited | January 30, 2024 |
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