Please use this identifier to cite or link to this item:
Mueller, Elisabeth
Spitz, Alexandra
Year of Publication: 
Series/Report no.: 
ZEW Discussion Papers 01-72
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.
company performance
managerial ownership
corporate governance
small and medium-sized enterprises
Document Type: 
Working Paper

Files in This Item:
203.41 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.