Managerial ownership and firm performance in German small and medium-sized enterprises

Elisabeth Mueller and Alexandra Spitz

No 01-72, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We analyze 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 up to around 40 percent. 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)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Managerial Ownership and Firm Performance in German Small and Medium-Sized Enterprises (2002)
Working Paper: Managerial ownership and firm performance in German small and medium-sized enterprises (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:5428

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