Management Share Ownership

Seminar Paper , 2006 , 40 Pages , Grade: sehr gut

Business economics - Investment and Finance

Many scholars have analyzed whether and how management share ownership should be used in terms of a corporate governance instrument to enhance corporate performance. The empirical results, however, have been inconclusive till this day. This seminar paper attempts to explain the problems and difficulties that underlie the obscurity and how researches might eventually unravel this challenge.

Inhaltsverzeichnis (Table of Contents)

• 1. Introduction
• 2. Why give managers a stake in the company?
• 2.1. Separation of ownership & control
• 2.2. Theoretical perspectives
• 2.2.1. Agency Theory
• 2.2.1.1. The conflict
• 2.2.1.2. Agency solutions
• 2.2.3. Stewardship Theory
• 2.2.4. Takeover Market Theory
• 2.2.5. Environmental Contingency Model
• 3. Empirical Literature Appraisal
• 3.1. The effect of managerial stock ownership on corporate value
• 3.2. The turning point – facing the endogeneity problem
• 3.3. Recent literature – reconciling the antithesis?
• 4. Critical analysis of selected studies
• 4.1. Morck et al. (1988)
• 4.2. Himmelberg et al. (1999)
• 4.3. Davies et al. (2005)
• 5. Conclusions

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This seminar paper aims to examine the complex relationship between management share ownership and corporate performance. It seeks to understand the theoretical underpinnings of this relationship, analyze the empirical evidence, and discuss the challenges associated with interpreting research findings.

• The separation of ownership and control in corporations.
• The role of agency theory and stewardship theory in explaining managerial behavior.
• The impact of management share ownership on corporate value.
• The endogeneity problem and its implications for empirical research.
• The critical analysis of selected studies on management share ownership.

Zusammenfassung der Kapitel (Chapter Summaries)

• Chapter 1: Introduction - This chapter provides an overview of the topic and outlines the paper's objectives.
• Chapter 2: Why give managers a stake in the company? - This chapter explores the theoretical foundations for management share ownership, delving into the separation of ownership and control and examining various perspectives including agency theory, stewardship theory, and takeover market theory.
• Chapter 3: Empirical Literature Appraisal - This chapter reviews the empirical literature on the relationship between management share ownership and corporate performance. It discusses the challenges associated with measuring this relationship and addresses the endogeneity problem.
• Chapter 4: Critical analysis of selected studies - This chapter critically analyzes three major studies on management share ownership, highlighting their methodologies, findings, and limitations.

Schlüsselwörter (Keywords)

This paper focuses on the crucial topics of corporate governance, management share ownership, agency theory, stewardship theory, empirical research, endogeneity problem, corporate performance, and corporate value.

• College: University of Münster (Finance Center Münster)
• Grade: sehr gut
• Author: Dipl.-Kfm. Christian Alexander Wegener (Author)
• Publication Year: 2006
• Pages: 40
• Catalog Number: V165736
• ISBN (eBook): 9783640814473
• ISBN (Book): 9783640814725
• Language: English
• Tags: Corporate value, management share ownership, corporate governance