The Determinants of Stock Option Compensation: Evidence from Finland

A new, long, and rich panel data set consisting of all Finnish publicly traded firms is used to study how firm characteristics and stock market developments influence the adoption and targeting of stock option compensation. Stock option adoption is found to be a procyclical phenomenon. Findings from firm‐level econometric analysis often corroborate those based on U.S. data, but important differences also emerge. Findings include: (i) firms with higher market value per employee are more likely to use stock option compensation; (ii) share returns from the past year affect the adoption of targeted stock options, but not broad‐based plans; (iii) our results are consistent with the hypothesis that selective and broad‐based plans arise as solutions to differing monitoring difficulties. Broad‐based schemes are observed when production is human capital‐intensive and employee performance is hard to monitor, while selective schemes are adopted when ownership is dispersed and therefore owners may have weak incentives to monitor management.     

Hooliganism and Police Tactics

In this paper, we introduce a model of hooliganism to study how different types of policing can be expected to affect violence and the number of hooligans in violent supporter clubs. Hooligans differ in their preferred level of fighting, and obtain utility also from social identity that belonging to a supporter club gives. We find that an increase in discriminative policing, like intelligence units, always reduces violence. Indiscriminate policing, such as the use of teargas or random jailing of potential law breakers, may, however, backfire and result in smaller and more brutal groups.     

How Does Employee Involvement Stack Up? The Effects of Human Resource Management Policies on Performance in a Retail Firm

The impact of innovative human resource management (HRM) practices on performance is investigated using panel data for all units of a retail firm. Our rich data include measures of the operating environment, important dimensions of core inputs, and information on HRM environments, and output is measured as value added. We estimate augmented production functions, including both establishment and manager fixed effects. When employees have opportunities to participate, and receive appropriate information and feedback from their supervisors, productivity is enhanced. Thus, even in settings where employees do simple tasks and are relatively low-skilled, participatory work environments can enhance business performance.     

Workplace Innovations and Employee Outcomes: Evidence from Finland

In the recent literature on workplace innovations, two competing views stand out. One strand of literature emphasizes positive outcomes for employees in the form of increased discretion, improved job security, and enhanced job satisfaction. In turn, critics argue that workplace innovations lead to increased job intensity and mental strain, and compromise job security. We address these issues by using a representative data set on individual employees from Finland. Our results indicate that workplace innovations are mainly associated with beneficial outcomes for employees. They are consistent with the view that institutional features of the Finnish labor market may mediate the outcomes.