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|Title: ||Managerial Stock Ownership As A Corporate Control Device: When Is
|Authors: ||Cebenoyan, A. Sinan|
Cooperman, Elizabeth S.
Register, Charles A.
|Keywords: ||Agency Theory|
|Issue Date: ||Oct-2000 |
|Series/Report no.: ||FIN-00-043|
|Abstract: ||It has long been accepted that managerial stock ownership, beyond some
range of possible entrenchment, can be an effective means of aligning
the interests of professional managers with those of a firm’s
outside owners to the benefit of firm performance. In this paper, we
offer evidence on the effectiveness of managerial stock ownership as a
corporate control device by analyzing the behavior of 81 thrift
institutions operating over the six-year period, 1989-1994. Based on the
estimation of stochastic cost and profit frontiers, as well as other
performance measures, our results suggest that managerial stock
ownership provides an effective corporate control device. However, this
device is only effective as managerial holdings surpass about 33% of
outstanding shares for improvements in cost efficiency and about 40% for
|Appears in Collections:||Finance Working Papers|
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