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.     

Climbing the Job Ladder: New Evidence of Gender Inequity

An explanation for the gender wage gap is that women are less able or less willing to “climb the job ladder.” However, the empirical evidence on gender differences in job mobility has been mixed. Focusing on a subsample of younger, university‐educated workers from an Australian longitudinal survey, we find strong evidence that the dynamics of promotions and employer changes worsen women’s labor market position.     

The Relationship between Multiple Choice and Essay Response Questions in Assessing Economics Understanding

Efficiency considerations have led to increased use of multiple-choice questions to assess economics understanding at the secondary and tertiary levels throughout Australia. A multiple-choice test would suffice if multiple-choice and essay questions measure the same dimensions of knowledge, as suggested by least squares estimation of the relationship between these two forms of testing. We show a simultaneous equation bias inherent in least squares estimation of the relationship between these two forms. A two-stage least squares estimation reveals no relationship, implying that these testing forms measure different dimensions of knowledge. Thus, a single form of testing economics knowledge must be avoided.     

British Evidence on The Employment Effects of Profit Sharing

A sample of British firms with diverse sharing arrangements is used to investigate the effects of profit sharing on employment levels. Employment effects are sometimes significant, but this depends upon the measure of profit sharing, how the dynamics are modeled, and whether measures of employee participation in decision making are included in the estimating equation. Using a continuous measure of profit sharing, employment effects, which typically range from -6 per cent to 6 per cent, are much more modest than those obtained by some other researchers. Most findings are not dramatically affected by estimating the specifications separately for discrete time periods, for individual industries, or for larger firms.     

Determinants of the Use of Advanced Technologies

There is an extensive literature about the influences on the adoption of new technologies. However, while we often assert the role of qualifications and skills in the innovation and diffusion processes, there has been little formal econometric work in this area. One of the key reasons for this is the lack of information about human capital in firm accounts, at all levels of the organisation, including the top executive and board of directors. This paper draws on a large, firm level data set to explore the linkages between the adoption and use of 13 advanced technologies and the qualification and skill structure of the enterprise. In addition, it provides a number of further insights about the effects of ownership, firm size and industry structure.     

DWELLING LAYOUT AND COMMUNICATION BETWEEN ROOMS: TOPOLOGICAL REPRESENTATION AND A CLASSIFICATION SYSTEM

This paper presents a method for the topological representation of dwelling floor plans and a system for the classification of a floor plan according to the amount of communication possible between the rooms.