The Impact of CEO Long-term Equity-based Compensation Incentives on Economic Growth in Collectivist versus Individualist Countries
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The Department of Finance seeks to provide knowledge of the descriptive, behavioral, and analytical background of financial management, in preparation for positions in sales management, marketing research, retail, etc.
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The Department of Finance was formed in 1984 in the College of Business Administration (later College of Business).
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1984–present
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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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This article is published as Campbell, C.J., Chang,R.P., DeJong Jr., J.C.,Doktor, R., Oxelheim, L., Randoy, T., The Impact of CEO Long-term Equity-based Compensation Incentives on Economic Growth in Collectivist versus Individualist Countries. Asian Economic Papers.; Summer 2016, 15(2); 109-133. Doi: 10.1162/ASEP_a_00432. Posted with permission.