An analysis of employee stock options in Japan

This paper analyzes the current state of non-executive employee stock option (ESO) issuance in Japan from both micro and macro perspectives using firm data issued in 2000. I find firstly that the main determinant of ESO issuance for individual firms is the extent of their corporate flexibility, although other hypotheses may be applicable depending on the industrial sector; and secondly that the impact on the macro economy is still quite small at the aggregate level at present. However, I also find that taking appropriate account of the fair cost of issuing ESOs could have a substantial effect on the currently disclosed profits of individual issuing firms. The moment firms recognize that ESO issuance is no longer a new-fangled practice, it may well become rapidly widespread and, as a result, could distort aggregate corporate profits on a macro basis.科学研究費補助金（特定領域研究） = Grant-in-Aid for Scientific Research on Priority Areas13, [1], [1], [1], [2], [1], [2], [1], [1], [1], [1] p