Managerial ownership and firm performance in German small and medium-sized enterprises

Mueller, Elisabeth and Spitz, Alexandra (2002) Managerial ownership and firm performance in German small and medium-sized enterprises. CEPDP (528). London School of Economics and Political Science. Centre for Economic Performance, London, UK. ISBN 0753015498

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Abstract

This paper studies the effect of managerial ownership on performance and the determinants of managerial ownership for small and medium-sized private companies. We use a panel of around 1300 firms in the German business-related service sector for the years 1997-2000. Managerial ownership up to around 80 per cent has a positive impact on firm performance (incentive effect); for higher shares the effect becomes negative (entrenchment effect). Moreover, risk-aversion of managers and signalling of firm quality leads to a non-linear relationship between managerial ownership and the risk exposure of a firm. The determinants of performance and ownership are estimated simultaneously.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk
Additional Information:	© 2002 the authors
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HD Industries. Land use. Labor
JEL classification:	C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C23 - Models with Panel Data G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
Date Deposited:	29 Jul 2008 10:21
Last Modified:	15 Sep 2023 22:51
URI:	http://eprints.lse.ac.uk/id/eprint/20083

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