Executive Stock Ownership and Performance: Tracking Faint Traces

Loderer, Claudio; Martin, Kenneth (1997). Executive Stock Ownership and Performance: Tracking Faint Traces. Journal of Financial Economics, 45, pp. 223-255. North-Holland

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We examine the relation between managers' financial interests and firm performance. Since the relation could go in either direction, we cast the analysis in a simultaneous equations framework. For firms involved in acquisitions, we find that acquisition performance and Tobin's Q ratios affect the size of managers' stockholdings. We find no evidence, however, that larger stockholdings lead to better performance. Perhaps management is effectively disciplined by competition in product and labor markets. Alternatively, it may not be necessary for top executives to own stock to the residual claimants. And finally, higher ownership might multiply the opportunities to appropriate corporate wealth.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Financial Management

UniBE Contributor:

Loderer, Claudio

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0304-405X

Publisher:

North-Holland

Language:

English

Submitter:

Karin Dolder

Date Deposited:

18 Dec 2013 09:16

Last Modified:

10 Aug 2016 08:37

BORIS DOI:

10.7892/boris.39528

URI:

https://boris.unibe.ch/id/eprint/39528

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