Empirical Study On The Relationship Of Managerial Ownership And Corporate Performance Based On The Listed Compamies In Our Country

Since the separation of ownership and management rights,what the theory and practice circle have concerned is how to motivate the managers to work hard.Managerial ownership,which was produced and widely applied in the United States and has played a significant incentive effect is an incentive mechanism which the options are given to the managers.As the national conditions,systems,environments in China are different from Western countries',whether the managerial ownership will play an active role in enhancing corporate performance have also attracted the attention of scholars from China.The conclusion from different scholars is not consistent.Therefore,the purpose of this study is to study the relationship between the managerial ownership and the corporate performance and provide some reference suggestions in improving corporate governance in China.Separation of ownership,principal-agent theory,human capital theory and the entrepreneurial business profits theory are the theoretical basis to understand the managerial ownership.Domestic and foreign research results and conclusions play a directive function in studying the relationship between managerial ownership and corporate performance.According to the defects in accordance with existing literature,we can improve research methods and ideas.In this paper,three years of data 2007-2009 from A share listed companies in the Shanghai Stock Exchange is studied as the sample.We consider the proportion of managerial ownership as independent variables and consider earnings per share and return on assets as the dependent variable respectively.Then we will build the model and use Eviews5.0 statistical software to finish the regression analysis.At last,we will conclude the empirical analysis based on the examination from the previous literature.The conclution about them is that managerial ownership and corporate performance have non-linear relationship that exists the interval effects.Corporate Performance will rise,then decrease and rise lastly with the increasing of the proportion of managerial ownership.Earnings per share and return on total assets are recognized as independent variables spectively and the proportion of managerial ownership is recognized as the dependent variable,the result is that corporate performance doesn't affect managerial ownership.The nature of the largest shareholder equity is state-owned shares or legal person shares.So the comparative analysis is operated in the the two types of companies,the managerial ownership incentive effect is more effective in the legal person shares type than the state-owned shares type.Finally,the empirical analysis is conducted in different industry,the industry which has stronger competition is more suitable for the managerial ownership incentive mechanism.The more competitive industry the company faces,the better effect of managerial ownership mechanism makes.Based on the research and conclusions,some reasonable suggestions are proposed in order to bring into play the managerial ownership incentive mechanism and improve corporate performance.