The Empirical Analysis Of Relation Between Managerial Ownership And Corporate Performance

Managerial ownership as a brand-new incentive mechanism has attracted lots of attention both academically and practically. More and more professionals and experts deem it as the impulse to economy and the golden handcuffs to maintain talents. However, since the 2008 financial risks, there was a serious criticism about some extraordinarily high salaries and abnormal stock option incentive existing in financial industries. People began to doubt the function and defects of the managerial ownership plan. All this attracts me to make a research on the environment to implement this incentive mechanism and its final effects.This thesis firstly collected and arranged relevant articles both domestically and abroad, made a full study about the academical accomplishment, compared the disparity between different researchers and analyzed the reason; secondly,tried to explain the necessity and root why the management has to hold some equity, I involved some classical theories when doing this research, such as the theories of principal-agent, human resources, enterprise contract and team production.Besides, I also tryed to figure out the relationship between managerial ownership and corporate performance from the theoretic aspect, clarifying the Incentive Alignment Argument, the Entrenchment Argument and the Combined Theory; thirdly, I made an statistical analysis about the managerial ownership situation in 2007-2009; lastly, I chose 592 listed companies which had implemented the managerial ownership mechanism as samples, designed a model and made an regression analysis about the relation between managerial ownership and the corporate performance.The statistical results showed that,in 2007-2009, there was approximately 64% of listing companies whose management held some stocks, the proportion was relatively stable in these three years;After the reform of non-tradable shares, the average level of share holding in management was rising a lot when compared with the prior period before 2006, the percentage stayed steady in 8.7% this two years, but the share holding level was very low in most companies and there was apparent difference between various industries.The result of regression analysis reveals that the linear relation between managerial ownership and corporate performance is more apparent and stable. That is to say, the incentive mechanism of distributing some shares to management will have a positive effect to corporate value. Because the level of managerial share holding in most listed companies is very low, so there is little possibility of management entrenchment and the "∩-style" assumption doesn't pass the significance test.To ensure the efficiency of the managerial ownership, we should establish some supporting mechanisms, pay attention to the distribution of equity and select appropriate beneficiaries. We should perfect the scheme from the perspectives of capital market, policies and laws, corporate structure, manager market and performance assessment system.