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Early and late adoption of American-style executive pay in Germany: Governance and institutions

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  • Chizema, Amon
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    Abstract

    Employing the theoretical perspective of neo-institutional change, this paper identifies the characteristics of early and late adoption of executive stock options (ESOs) in German firms. The paper contributes to the debate over the convergence/divergence of corporate governance systems, adding to the literature on institutional change by demonstrating the reaction of intra-organizational actors to macro-level changes. The study finds that there is employee resistance to the adoption of ESOs in the early stages, and older firms, embedded in traditional practices, prefer to maintain the status quo. Prior adoption of shareholder value oriented practices helps to smooth the way for subsequent adoptions for both early and late adopters. The full convergence of corporate governance systems is still not imminent.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of World Business.

    Volume (Year): 45 (2010)
    Issue (Month): 1 (January)
    Pages: 9-18

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    Handle: RePEc:eee:worbus:v:45:y:2010:i:1:p:9-18

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    Keywords: Executive stock options Adoption Neo-institutional Theory Corporate governance Germany;

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    Cited by:
    1. Schmid, Stefan & Dauth, Tobias, 2014. "Does internationalization make a difference? Stock market reaction to announcements of international top executive appointments," Journal of World Business, Elsevier, vol. 49(1), pages 63-77.

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