Options trading, managerial risk-taking, and brand development

IF 3.6 2区经济学 Q1 BUSINESS, FINANCE

Journal of Banking & Finance Pub Date : 2024-10-21 DOI:10.1016/j.jbankfin.2024.107319

Po-Hsuan Hsu , Fengfei Li , Yoshio Nozawa

引用次数: 0

Abstract

This study examines how options trading influences brand development strategies by encouraging managerial risk-taking. We find that firms with higher levels of options trading tend to introduce more new trademarks, which exhibit lower citation rates from subsequent trademarks. These firms favor brand creation over extension, leading to increased brand riskiness, as evidenced by greater trademark diversity. Potential channels for these effects include increased institutional ownership by transient investors and enhanced managerial hedging opportunities. These effects are more pronounced in firms with weaker governance, managers with higher pay-risk sensitivity, younger managerial teams, and intense competition. Additionally, we observe a negative relation between unrelated brand diversification, driven by options trading, and firm value. Our findings support the notion that active options markets incentivize managers to pursue riskier brand strategies.

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期权交易、管理风险承担和品牌发展

本研究探讨了期权交易如何通过鼓励管理者冒险来影响品牌发展战略。我们发现，期权交易水平较高的公司往往会推出更多新商标，而这些商标在后续商标中的引用率较低。这些公司更倾向于品牌创造而非品牌延伸，从而导致品牌风险性增加，商标多样性增加就是证明。产生这些效应的潜在渠道包括临时投资者的机构所有权增加和管理者对冲机会增加。这些效应在治理较弱、管理者对薪酬风险敏感度较高、管理团队较年轻以及竞争激烈的企业中更为明显。此外，我们还观察到由期权交易驱动的非相关品牌多样化与公司价值之间存在负相关关系。我们的研究结果支持这样一种观点，即活跃的期权市场会激励管理者追求风险更高的品牌战略。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Banking & Finance Multiple-

CiteScore

6.40

自引率

5.40%

发文量

262

期刊介绍： The Journal of Banking and Finance (JBF) publishes theoretical and empirical research papers spanning all the major research fields in finance and banking. The aim of the Journal of Banking and Finance is to provide an outlet for the increasing flow of scholarly research concerning financial institutions and the money and capital markets within which they function. The Journal''s emphasis is on theoretical developments and their implementation, empirical, applied, and policy-oriented research in banking and other domestic and international financial institutions and markets. The Journal''s purpose is to improve communications between, and within, the academic and other research communities and policymakers and operational decision makers at financial institutions - private and public, national and international, and their regulators. The Journal is one of the largest Finance journals, with approximately 1500 new submissions per year, mainly in the following areas: Asset Management; Asset Pricing; Banking (Efficiency, Regulation, Risk Management, Solvency); Behavioural Finance; Capital Structure; Corporate Finance; Corporate Governance; Derivative Pricing and Hedging; Distribution Forecasting with Financial Applications; Entrepreneurial Finance; Empirical Finance; Financial Economics; Financial Markets (Alternative, Bonds, Currency, Commodity, Derivatives, Equity, Energy, Real Estate); FinTech; Fund Management; General Equilibrium Models; High-Frequency Trading; Intermediation; International Finance; Hedge Funds; Investments; Liquidity; Market Efficiency; Market Microstructure; Mergers and Acquisitions; Networks; Performance Analysis; Political Risk; Portfolio Optimization; Regulation of Financial Markets and Institutions; Risk Management and Analysis; Systemic Risk; Term Structure Models; Venture Capital.