EconPapers    
Economics at your fingertips  
 

Bank monitoring, managerial ownership and Tobin's Q: an empirical analysis for India

Saibal Ghosh

Managerial and Decision Economics, 2007, vol. 28, issue 2, 129-143

Abstract: The paper examines how banking relationships and managerial ownership relate to firm valuation. It is argued that both the number of banking relationships (which serves as an external monitoring function) and managerial ownership (which serves as an internal monitoring function) affect firm value, while internal monitoring by managers and external monitoring by banks were viewed as substitutes or complements. After controlling for the effect of exogenous variables, the results reveal the existence of a complementary monitoring effect between banks and the managerial group. On the other hand, the results indicate that increased external monitoring by banks will simultaneously raise the incentive on the part of managers to engage in internal monitoring. Also, firm valuation is found to be a significant determinant of managerial ownership. A disaggregated analysis of firms according to size and leverage suggests the existence of a complementary monitoring effect between banks and managers, except for small-sized firms. Copyright © 2007 John Wiley & Sons, Ltd.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1002/mde.1315 Link to full text; subscription required (text/html)

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:wly:mgtdec:v:28:y:2007:i:2:p:129-143

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2019-08-05
Handle: RePEc:wly:mgtdec:v:28:y:2007:i:2:p:129-143