The Impact of CEO Long-Term Equity-Based Compensation Incentives on Economic Growth in Collectivist versus Individualist Countries

Author(s)

Jack De Jong Jr., Nova Southeastern UniversityFollow
Cynthia J. Campbell
Rosita P. Chang
Robert Doktor
Lars Oxelheim
Trond Randoy

Document Type

Article

Publication Title

Asian Economic Papers

ISSN

1535-3516

Publication Date

2016

Abstract/Excerpt

This study examines the impact of the prevalence of long-term equity-based chief executive officer (CEO) compensation incentives on GDP growth, and we address the moderating role of individualist versus collectivist cultures on this relationship. We argue that long-term incentives given to CEOs in some firms may convey to other CEOs that they too may be able to receive such incentives and rewards if they emulate the incentivized and rewarded CEOs. In a longitudinal study across 22 nations over a 5-year period, we find that the higher proportion of CEOs in a country are awarded long-term equity-based incentive compensation, the greater future real GDP growth, particularly in collectivist countries.

DOI

https://doi.org/10.1162/ASEP_a_00432

Volume

15

Issue

2

First Page

109

Last Page

133

NSUWorks Citation

De Jong, Jack Jr.; Campbell, Cynthia J.; Chang, Rosita P.; Doktor, Robert; Oxelheim, Lars; and Randoy, Trond, "The Impact of CEO Long-Term Equity-Based Compensation Incentives on Economic Growth in Collectivist versus Individualist Countries" (2016). HCBE Faculty Articles. 777.
https://nsuworks.nova.edu/hcbe_facarticles/777