Managerial Ownership And Firm Performance In Listed Private Companies Of China

Managerial ownership has been a hotspot issue in corporate governance. As an incentive mechanism, it is supposed to reduce the conflicts between shareholders and management effectively. However, the empirical results on the connection between managerial ownership and firm performance show this incentive mechanism controversial. Because of the significant difference of policy and market environment compared to foreign countries, it makes very important application sense to identify the characteristic of the influencing mechanism of managerial ownership on firm performance.To eliminate the non-market affection of state-controlled, we choose listed private companies as our target. First of all, we theoretically analyze the function mechanism of managerial ownership. Next, we introduce the current status of governance in listed private companies from ownership structure and control methods, general meeting and board of directors as well as external corporate control market.Thirdly, we investigate the impact of managerial ownership on firm performance based on the perspective of investment behavior. Using the panel data of 142 listed private companies in Shanghai stock market, we confirm the endogeneity of managerial ownership. More importantly, we find the indirect impact of managerial ownership on firm performance by controlling investment level.Then, we explain this influencing mechanism using behavioral finance and short-term finance separately. The problem reflected by this mechanism and probable results are also concerned. At last, we give some advice based on this influencing mechanism of managerial ownership on firm performance.