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Title:Managerial ownership and firm performance in German small and medium-sized enterprises PDF Logo
Authors:Mueller, Elisabeth
Spitz, Alexandra
Issue Date:2001
Series/Report no.:ZEW Discussion Papers 01-72
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.
Subjects:company performance
managerial ownership
corporate governance
small and medium-sized enterprises
JEL:G32
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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