The Ethical Dimension of Management Ownership in China

Wei Li (), Yaping Wang (), Liansheng Wu () and Jason Zezhong Xiao ()
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Wei Li: Beijing International Studies University
Yaping Wang: Peking University
Liansheng Wu: Peking University
Jason Zezhong Xiao: Cardiff University

Journal of Business Ethics, 2017, vol. 141, issue 2, No 10, 392 pages

Abstract: Abstract Management ownership has ethical consequences because it has an interest alignment effect or an entrenchment effect. In this paper, we investigate the ethical consequences of management ownership in China using accounting conservatism as the direct measure of entrenchment and alignment between shareholders and managers. We argue and find that the ethical effect of management ownership differs significantly in firms with different ultimate controlling shareholders. Specifically, management ownership in non-state-owned enterprises (NSOEs) has an alignment effect, while management ownership has less of an alignment effect in state-owned enterprises than in NSOEs. These results show that the ethical consequences of management ownership are moderated by the nature of ultimate controlling ownership.

Keywords: Accounting conservatism; China; Corporate ownership; Ethical dimension; Management ownership (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s10551-015-2722-1

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