Ownership structure, managerial behaviour and corporate value

Research output: Contribution to journalArticle

101 Citations (Scopus)

Abstract

The nonlinear relationship between corporate value and managerial ownership is well documented. This has been attributed to the onset of managerial entrenchment, which results in a decrease of corporate value for increasing levels of managerial holdings. We propose a new structure for this relationship that accounts for the effect of conflicting managerial incentives, and external and internal disciplinary monitoring mechanisms. Using this specification as the basis for our analysis, we provide evidence that the managerial ownership-corporate value relationship is co-deterministic. This finding is at odds with recent work which reports that corporate value determines managerial ownership but not vice-versa.
LanguageEnglish
Pages645-660
Number of pages15
JournalJournal of Corporate Finance
Volume11
Issue number4
DOIs
Publication statusPublished - 19 Apr 2005

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Managerial behavior
Corporate value
Ownership structure
Managerial ownership
Managerial entrenchment
Nonlinear relationships
Managerial incentives
Monitoring

Keywords

  • Ownership structure
  • Capital expenditure
  • Corporate value
  • managerial entrenchment

Cite this

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Ownership structure, managerial behaviour and corporate value. / Davies, J.R.; Hillier, David J.; McColgan, Patrick.

In: Journal of Corporate Finance, Vol. 11, No. 4, 19.04.2005, p. 645-660.

Research output: Contribution to journalArticle

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