Abstract
Prior studies have not reasonably explained why executive stock options (ESOs) encourage innovation through vega rather than delta. This study re-examines the relationship among vega, delta and innovation performance when stock prices are informative. The findings indicate that informative stock prices amplify the delta effect on encouraging executives to improve innovation performance but that informative prices alleviate the traditional positive effect of vega on innovation. Moreover, when stock prices are informative, deep-in-the-money options reduce the positive effect of delta on innovation, whereas the state control, independent directors and manager and director shareholding enhance (reduce) the positive effect of delta (vega) on innovation. The results hold after conducting robustness tests.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
