Managerial ownership and the effectiveness of internal control

Yanmei Liu

Finance Research Letters, 2023, vol. 58, issue PA

Abstract: This paper examines the impact of managerial ownership on the effectiveness of internal control in China's stock markets, focusing on the perspective of managerial ownership. The findings reveal a significant quadratic non-linear relationship, characterized by an inverted-U shape, between the level of managerial ownership and the effectiveness of internal control for the overall population of listed companies. Notably, the inverted U-shaped effect of managerial ownership on internal control is observed to be more delayed in non-state-owned listed companies. However, these companies exhibit a stronger incentive effect, and the 'Entrenchment Effects' become apparent at an earlier stage.

Keywords: Managerial ownership; Internal control effectiveness; The convergence of interest effects; The entrenchment effects (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323007110

DOI: 10.1016/j.frl.2023.104339

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