Document Type

Book Chapter

Publication Date


Journal or Book Title

Markets and Compensation for Executives in Europe


This paper analyzes the existence of a potential link between the prevalence of long term incentive compensation schemes and the economic prosperity of a country. This issue is previously not addressed in the literature. In a panel regression with fixed effects a strongly significant, positive effect is found between growth of GDP/capita in real terms and this prevalence, while controlling for general investment and institutional variables. However, when the 22 countries of the study are divided into European and non-European, the growth effect found for the entire material accrues only to the non-European countries. It is concluded that long term incentive contracts seem to have no effect in the European countries due to labor market and cultural reasons.


This working paper was published in Markets and Compensation for Executives in Europe, Oxelheim, L. and C. Wihlborg, eds., Bingley: Emerald Publishing, 2008.

Copyright Owner

Emerald Publishing



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