Managerial ownership and labor income share

Huaizhi Shi

Finance Research Letters, 2024, vol. 62, issue PB

Abstract: This paper investigates the influence of executive compensation on labor income share. I expect that higher managerial shareholding reduces labor income share. Consistent with this conjecture, the empirical evidence suggests that both augmented innovation investment and alleviated bankruptcy costs explain the reduction in labor income share. Our results remain robust by addressing the potential unobserved variable concerns and reverse causality issues. Heterogeneity tests show that the effect is more pronounced in firms with weaker political connections, higher institutional ownership, higher customer concentration, and in state-owned firms. This study contributes to the merging literature on the lowering of labor income share.

Keywords: Managerial ownership; Labor income shares; Agency problems; Bankruptcy costs (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612324002137
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:62:y:2024:i:pb:s1544612324002137

DOI: 10.1016/j.frl.2024.105183

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().