Management Ownership and Corporate Performance: an Empirical Analysis
32 Pages Posted: 9 Jun 2004 Last revised: 30 Jan 2013
Date Written: October 1986
We investigate the relation between management ownership and corporate performance, as measured by Tobin's Q. In a cross-section of Fortune 500 firms, Tobin's Q first increases and then declines as board of directors holdings rise. For older firms there is weak evidence that Q is lower when a firm is run by a member of the founding family than when it is run by an officer unrelated to the founder.
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