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An empirical investigation of executive stock option granting in Malaysia

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  • Ahmad Ibn Ibrahimy
  • Rubi Ahmad

Abstract

Ownership structure is an imperative factor in determining firm objectives, increasing the shareholders' wealth and disciplining the executives. Our study looks into the effectiveness of yearly executive stock option (ESO) granting as a corporate governance mechanism designed to reduce agency problems, thereby increasing firm value. Using fixed effect panel data analysis, we found a significant positive relationship between ESO granting and firm value in the presence of concentrated ownership in Malaysia. This relationship is significant for the years next to the years of ESO granting occurrences while considering both market and accounting-based performance measurements. Additionally, based on firm-size, we also found a significant difference of ESO granting of Malaysian non-financial firms.

Suggested Citation

  • Ahmad Ibn Ibrahimy & Rubi Ahmad, 2016. "An empirical investigation of executive stock option granting in Malaysia," International Journal of Business Excellence, Inderscience Enterprises Ltd, vol. 10(4), pages 433-448.
    • Handle: RePEc:ids:ijbexc:v:10:y:2016:i:4:p:433-448
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    Cited by:

    1. Chia, Yee-Ee & Lim, Kian-Ping & Goh, Kim-Leng, 2020. "Liquidity and firm value in an emerging market: Nonlinearity, political connections and corporate ownership," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).

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