This paper investigates whether stock option grants increase managerial risk taking in Japan by using intraday stock return data as well as daily stock return data and yearly financial data. As with previous US studies, we find that firms that announce stock option grants experience...

Japanese firms are more likely to adopt new stock option plans when they are more owned by directors and arms-length investors (institutional investors and foreigners) while the probability of adopting option plans is negatively associated with ownership by stable and controlling shareholders....