Managerial Ownership and Company Performance in German Small and Medium- Sized Private Enterprises
Elisabeth Mueller () and
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Spitz-Oener Alexandra: Humboldt University,Berlin, Germany
German Economic Review, 2006, vol. 7, issue 2, 233-247
We analyse the relationship between managerial ownership and company performance, testing the incentive and entrenchment hypothesis. Differently from previous literature, we focus on small and medium-sized private enterprises which constitute an important part of the German economy. We use a panel of 356 companies in the German business-related service sector for the years 1997-2000. Our findings are that performance, measured by survey-based profit information, is increasing in managerial ownership by up to around 40 per cent. We do not find a significant entrenchment effect, possibly because, at levels at which managers could become entrenched, they already bear a large proportion of the costs and have therefore an incentive to maximize company value.
Keywords: Company performance; managerial ownership; corporate governance; small and medium-sized enterprises (search for similar items in EconPapers)
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Journal Article: Managerial Ownership and Company Performance in German Small and Medium‐Sized Private Enterprises (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:germec:v:7:y:2006:i:2:p:233-247
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