IDEAS home Printed from https://ideas.repec.org/a/wly/ijfiec/v24y2019i1p20-32.html
   My bibliography  Save this article

Does size affect the relation between option compensation and managerial risk taking? Evidence from Canadian listed companies

Author

Listed:
  • Atreya Chakraborty
  • Lucia Silva Gao
  • Shahbaz Sheikh

Abstract

We examine the effect of CEO option compensation on firm risk in Canadian firms listed on the S&P/TSX index. Results show that there is a robust size effect. Option compensation has a positive and significant effect on firm risk only in small firms and no significant effect in large firms. Moreover, option compensation has no significant effect on firm risk in cross‐listed firms, but within the sample of cross‐listed firms option compensation has a positive and significant effect in small firms only. Overall, our results suggest that CEO compensation is more effective in encouraging risk taking in small Canadian firms.

Suggested Citation

  • Atreya Chakraborty & Lucia Silva Gao & Shahbaz Sheikh, 2019. "Does size affect the relation between option compensation and managerial risk taking? Evidence from Canadian listed companies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 24(1), pages 20-32, January.
  • Handle: RePEc:wly:ijfiec:v:24:y:2019:i:1:p:20-32
    DOI: 10.1002/ijfe.1646
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/ijfe.1646
    Download Restriction: no

    File URL: https://libkey.io/10.1002/ijfe.1646?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abubakr Saeed & Syed Shafqat Mukarram & Yacine Belghitar, 2021. "Read between the lines: Board gender diversity, family ownership, and risk‐taking in Indian high‐tech firms," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 185-207, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:ijfiec:v:24:y:2019:i:1:p:20-32. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.interscience.wiley.com/jpages/1076-9307/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.