Broad-based stock options: before and after the market downturn

We examine labour productivity in small, medium and large firms that broadly distribute stock options under starkly different market conditions – during the bull (1995–7) and bear (2000–2) stock markets. We find greater labour output in both upward and downward markets in all firm size categories, with the exception of small firms in a declining market, where the productivity is also greater, but the statistical significance of the result is weak.