Effects of Employee Stock Bonuses on Technical Efficiency: Evidence from Taiwan's Electronic Industry

This paper examines the role of employee stock bonuses on the technical efficiency of Taiwan's electronic manufacturers. Using data envelopment analysis (DEA), we show that the majority of Taiwan's electronic manufacturers have better performance in their scale efficiency than pure technical efficiency, and their efficiency scores are higher for firms that distribute bonus to their employees. Moreover, we use Tobit regression analysis to determine what characteristics influence the efficiency measures obtained. Our results show that higher levels of employee stock bonuses are positively related to efficiency scores, which suggests that employee stock bonuses improve the performance of Taiwan's electronic firms.