Geography and CEO luck: where do CEOs tend to be lucky?

Pandej Chintrakarn, Napatsorn Jiraporn, Pornsit Jiraporn

Research output: Contribution to journalArticlepeer-review


CEOs are 'lucky' when they receive stock option grants on days when the stock price is the lowest in the month of the grant, implying opportunistic timing (Bebchuk et al., 2010). We extend Bebchuk et al. (2010) by investigating the geographic peer effects of CEO luck. Our evidence shows that a CEO is significantly more likely to be lucky when other CEOs in the surrounding area are not lucky. It appears that a CEO tends to practice opportunistic timing of option grants when such a practice is less prevalent and thus less noticeable in the nearby area, probably in order to avoid detection. We estimate that the marginal geographic effect on a given CEO's luck is 18.36%, which is both statistically and economically significant. Our results suggest that regulators should look for corporate opportunistic behaviour where it is not expected.

Original languageEnglish (US)
Pages (from-to)125-128
Number of pages4
JournalApplied Economics Letters
Issue number2
StatePublished - Jan 2014

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


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