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Managerial Ownership and Firm Performance in German Small and Medium-Sized Enterprises

Elisabeth Müller and Alexandra Spitz
Authors registered in the RePEc Author Service: Elisabeth Mueller ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper studies the effect of managerial ownership on performance and the determinants of managerial ownership for small and medium-sized private companies. We use a panel of around 1300 firms in the German business-related service sector for the years 1997-2000. Managerial ownership up to around 80 per cent has a positive impact on firm performance (incentive effect); for higher shares the effect becomes negative (entrenchment effect). Moreover, risk-aversion of managers and signalling of firm quality leads to a non-linear relationship between managerial ownership and the risk exposure of a firm. The determinants of performance and ownership are estimated simultaneously.

Keywords: corporate governance; managerial ownership; firm performance; small and medium-sized enterprises (search for similar items in EconPapers)
JEL-codes: G32 C23 (search for similar items in EconPapers)
Date: 2002-04
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Related works:
Working Paper: Managerial ownership and firm performance in German small and medium-sized enterprises (2002) Downloads
Working Paper: Managerial ownership and firm performance in German small and medium-sized enterprises (2001) Downloads
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