|Author Name||MORIKAWA Masayuki (Vice Chairman & Vice President, RIETI)
|Creation Date/NO.||February 2012 12-E-011|
|Research Project||Research on Measuring Productivity in the Service Industries and Identifying the Driving Factors for Productivity Growth
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This paper analyzes the relationship between the use of stock options and productivity by employing firm-level panel data from the Basic Survey of Japanese Business Structure and Activities. According to the analysis, the use of stock options has a positive impact on firm productivity. Productivity steadily increases after the adoption of stock options. In addition, we found suggestive evidence that R&D investment increases after the introduction of stock options. These results imply that the deregulation on the use of stock options in 1997 and the subsequent legal reforms have had positive contributions to the productivity performance of Japanese firms.