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Managerial ownership and the effectiveness of internal control

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  • Liu, Yanmei

Abstract

This paper examines the impact of managerial ownership on the effectiveness of internal control in China's stock markets, focusing on the perspective of managerial ownership. The findings reveal a significant quadratic non-linear relationship, characterized by an inverted-U shape, between the level of managerial ownership and the effectiveness of internal control for the overall population of listed companies. Notably, the inverted U-shaped effect of managerial ownership on internal control is observed to be more delayed in non-state-owned listed companies. However, these companies exhibit a stronger incentive effect, and the 'Entrenchment Effects' become apparent at an earlier stage.

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  • Liu, Yanmei, 2023. "Managerial ownership and the effectiveness of internal control," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323007110
    DOI: 10.1016/j.frl.2023.104339
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    References listed on IDEAS

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    Cited by:

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    2. Ma, Wentao & Li, Wanyun, 2024. "Blockchain technology and internal control effectiveness," Finance Research Letters, Elsevier, vol. 64(C).
    3. Látečková, Anna & Súlovská, Petra, 2025. "The Approach of Managers to the Internal Control System in Contemporary Agricultural Enterprises in Slovakia," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 17(1), March.
    4. Dabboussi Moez, 2024. "Does Managerial Power Explain the Association between Agency Costs and Firm Value? The French Case," IJFS, MDPI, vol. 12(3), pages 1-14, September.
    5. Jiang, Honglan, 2024. "Market-oriented debt-to-equity swap and enterprise financial performance," Finance Research Letters, Elsevier, vol. 67(PA).
    6. Zhihong Zhang & Hua Feng & Lulu Wang & Lingyun Yang, 2024. "How to achieve high-quality development of SRDI enterprises—A study of the TOE framework-based configuration," PLOS ONE, Public Library of Science, vol. 19(6), pages 1-21, June.

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