Management Ownership and Firm's Value: An Empirical Analysis Using Panel Data
AbstractDemsetz and Lehn (1985), Morck, Shleifer, and Vishny (1988), and McConnell and Servaes (1990) report different empirical findings regarding ownership structure and corporate profitability. In this paper, we re-estimate the relation between management ownership and firm's value after controlling for the history of management ownership as well as inter-firm differences using panel data. Further, we consider the possibility that the current ownership structure is jointly determined with the firm value, an endogeneity argument a la Demsetz (1983). We find that history of the management ownership, not its current level, matters in determining the firm value, which is consistent with information asymmetry arguments.
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Bibliographic InfoPaper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0593.
Date of creation: Sep 2003
Date of revision:
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