Year 2019, Volume 8, Issue 2, Pages 101 - 113 2019-06-30

THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA

Ratny Seng [1] , Kimly Heng [2] , Gao-Liang Tian [3] , Mohammad Arshad Arif [4] , Hua Feng [5]

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Purpose- This study is to investigate the firm risk-taking which influence by managerial of stock option.
Methodology- The empirical analysis of multiple regressions with a robustness test of OLS and STATA software were used in this study. In order to make our findings more practically and reliable, more robust tests have been applied, such as Fixed Effect Model with cluster standard error, Propensity Score Matching Model (PSM) and Dummy Effect Model.
Findings- stock option processing management has a significant positive impact on firm risk taking, market to book value, firm leverage, block-holder, asset turnover and portfolio have significant positive effects on firm risk taking. Firm size and state ownership have a significant negative impact on firm risk taking. Board does not influence on firm risk. It suggests top managers tend to use their power in managerial operation of stock option to manipulate earnings through employee stock option schemes, which causes companies to face high risk. Last result revealed that state ownership is helping to keep an eye on the corporation operation as a monitoring person.
Conclusion- Based on the results, this study delivered essential implication policy for investors, regulators, top manager as well as governance to take action in order to improve equity incentive system more effectively as well as to build healthier security markets in the world.
managerial, stock option, firm risk, China
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Primary Language en
Subjects Business Finance
Journal Section Articles
Authors

Orcid: 0000-0002-6261-8223
Author: Ratny Seng (Primary Author)

Orcid: 0000-0001-8818-1659
Author: Kimly Heng

Orcid: 0000-0002-7336-4759
Author: Gao-Liang Tian

Author: Mohammad Arshad Arif

Orcid: 0000-0003-3141-2545
Author: Hua Feng

Dates

Publication Date: June 30, 2019

Bibtex @research article { jbef583030, journal = {Journal of Business Economics and Finance}, issn = {}, eissn = {2146-7943}, address = {PressAcademia}, year = {2019}, volume = {8}, pages = {101 - 113}, doi = {10.17261/Pressacademia.2019.1041}, title = {THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA}, key = {cite}, author = {Seng, Ratny and Heng, Kimly and Tian, Gao-Liang and Arif, Mohammad Arshad and Feng, Hua} }
APA Seng, R , Heng, K , Tian, G , Arif, M , Feng, H . (2019). THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA. Journal of Business Economics and Finance, 8 (2), 101-113. DOI: 10.17261/Pressacademia.2019.1041
MLA Seng, R , Heng, K , Tian, G , Arif, M , Feng, H . "THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA". Journal of Business Economics and Finance 8 (2019): 101-113 <http://dergipark.org.tr/jbef/issue/46390/583030>
Chicago Seng, R , Heng, K , Tian, G , Arif, M , Feng, H . "THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA". Journal of Business Economics and Finance 8 (2019): 101-113
RIS TY - JOUR T1 - THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA AU - Ratny Seng , Kimly Heng , Gao-Liang Tian , Mohammad Arshad Arif , Hua Feng Y1 - 2019 PY - 2019 N1 - doi: 10.17261/Pressacademia.2019.1041 DO - 10.17261/Pressacademia.2019.1041 T2 - Journal of Business Economics and Finance JF - Journal JO - JOR SP - 101 EP - 113 VL - 8 IS - 2 SN - -2146-7943 M3 - doi: 10.17261/Pressacademia.2019.1041 UR - https://doi.org/10.17261/Pressacademia.2019.1041 Y2 - 2019 ER -
EndNote %0 Journal of Business Economics and Finance THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA %A Ratny Seng , Kimly Heng , Gao-Liang Tian , Mohammad Arshad Arif , Hua Feng %T THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA %D 2019 %J Journal of Business Economics and Finance %P -2146-7943 %V 8 %N 2 %R doi: 10.17261/Pressacademia.2019.1041 %U 10.17261/Pressacademia.2019.1041
ISNAD Seng, Ratny , Heng, Kimly , Tian, Gao-Liang , Arif, Mohammad Arshad , Feng, Hua . "THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA". Journal of Business Economics and Finance 8 / 2 (June 2019): 101-113. https://doi.org/10.17261/Pressacademia.2019.1041
AMA Seng R , Heng K , Tian G , Arif M , Feng H . THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA. JBEF. 2019; 8(2): 101-113.
Vancouver Seng R , Heng K , Tian G , Arif M , Feng H . THE IMPACT OF MANAGERIAL STOCK OPTION ON FIRM RISK TAKING: EVIDENCE FROM CHINA. Journal of Business Economics and Finance. 2019; 8(2): 113-101.