Please use this identifier to cite or link to this item: https://doi.org/10.1016/S0929-1199(01)00047-5
Title: The relationship between managerial ownership and firm performance in high R&D firms
Authors: Cui, H.
Mak, Y.T. 
Keywords: Firm performance
High-tech firms
Managerial ownership
Tobin's Q, R&D
Issue Date: 2002
Source: Cui, H., Mak, Y.T. (2002). The relationship between managerial ownership and firm performance in high R&D firms. Journal of Corporate Finance 8 (4) : 313-336. ScholarBank@NUS Repository. https://doi.org/10.1016/S0929-1199(01)00047-5
Abstract: Several studies have examined the relationship between managerial ownership and firm performance/value (e.g., [Journal of Financial Economics 20 (1988) 293; Journal of Financial Economics 27 (1990) 595; Journal of Corporate Finance 5 (1999) 79]). Using different samples, these studies provide general support for the argument that increases in managerial ownership create countervailing interest alignment and entrenchment effects, leading to a nonlinear relationship between managerial ownership and firm performance. However, the actual form of this nonlinear relationship differs across the studies. The present paper examines the relationship between managerial ownership and performance for high R&D firms that are listed on the NYSE, AMEX and NASDAQ. We find that Tobin's Q initially declines with managerial ownership, then increases, then declines again and, finally, increases again-a W-shaped relationship. The findings from our study point to the importance of industry effects in the relationship between managerial ownership and firm performance. © 2002 Elsevier Science B.V. All rights reserved.
Source Title: Journal of Corporate Finance
URI: http://scholarbank.nus.edu.sg/handle/10635/44499
ISSN: 09291199
DOI: 10.1016/S0929-1199(01)00047-5
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