Effect Of Stock Option On China Listed Companies' Corporate Behavior

As a long-term incentive system, stock option will ultimately end up on the growing of company performance. Since it is too short for China companys carry out the stock option plan, the long-term performance has not yet appeared.Meanwhile, corporate behaviors in the short term reflect the senior manager's intentions, which have great impact on corporate performance. The perpose of researching the effect of stock option on corpotate behavior in this paper,is analyzing effectiveness of stock option through companys' short-term behavior.This paper have collected information of all China listed companies from 2005-01-01 to 2010-04-30, which have announced to take stock option plan.Based on the general description of the status of implementation,55 companies are chosen as a group of valid sample to pass the significant test,which is the method of comparing the behaviors before and after stock option. Finally here comes to the conclusion:after stock option the company's financial decision-making behavior had no significant change. But the company's internal control has improved because of stock option.