Managerial ownership and firm performance: Evidence from China's privatizations

Li, D; Moshirian, F; Nguyen, P; Tan, LW

Managerial ownership and firm performance: Evidence from China's privatizations

Li, D Moshirian, F Nguyen, P Tan, LW

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Publication Type:: Journal Article
Citation:: Research in International Business and Finance, 2007, 21 (3), pp. 396 - 413
Issue Date:: 2007-09-01

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Field	Value	Language
dc.contributor.author	Li, D	en_US
dc.contributor.author	Moshirian, F	en_US
dc.contributor.author	Nguyen, P	en_US
dc.contributor.author	Tan, LW	en_US
dc.date.issued	2007-09-01	en_US
dc.identifier.citation	Research in International Business and Finance, 2007, 21 (3), pp. 396 - 413	en_US
dc.identifier.issn	0275-5319	en_US
dc.identifier.uri	http://hdl.handle.net/10453/15870
dc.description.abstract	We examine the relationship between managerial ownership and firm performance for a sample of Chinese State-owned enterprises (SOEs) privatized over the period 1992-2000. The results indicate that managerial ownership has a positive effect on firm performance. Although return on assets (ROA) and return on sales (ROS) decline post-privatization, firms with high managerial ownership and, specially, high CEO ownership, exhibit a smaller performance decline. The difference is highly significant, with or without controlling for residual state ownership and changes in the firm's operating environment. We also find that the influence on firm performance becomes less significant at higher levels of CEO ownership. In contrast, performance continues to increase with managerial ownership. This finding suggests that, beyond a certain point, the distribution of shares would be more effective if extended to the whole management team instead of being limited to the chief executive. © 2007 Elsevier B.V. All rights reserved.	en_US
dc.relation.ispartof	Research in International Business and Finance	en_US
dc.relation.isbasedon	10.1016/j.ribaf.2007.02.001	en_US
dc.subject.classification	Finance	en_US
dc.title	Managerial ownership and firm performance: Evidence from China's privatizations	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	21	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
dc.location.activity	ISI:A1994NU75100020
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Strength - CCG - Centre for Corporate Governance
utslib.copyright.status	closed_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	21	en_US

Abstract:

We examine the relationship between managerial ownership and firm performance for a sample of Chinese State-owned enterprises (SOEs) privatized over the period 1992-2000. The results indicate that managerial ownership has a positive effect on firm performance. Although return on assets (ROA) and return on sales (ROS) decline post-privatization, firms with high managerial ownership and, specially, high CEO ownership, exhibit a smaller performance decline. The difference is highly significant, with or without controlling for residual state ownership and changes in the firm's operating environment. We also find that the influence on firm performance becomes less significant at higher levels of CEO ownership. In contrast, performance continues to increase with managerial ownership. This finding suggests that, beyond a certain point, the distribution of shares would be more effective if extended to the whole management team instead of being limited to the chief executive. © 2007 Elsevier B.V. All rights reserved.

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http://hdl.handle.net/10453/15870