An Empirical Analysis Of The Relationship Between Management Shareholders With The Company’s Performance

When company’s ownership and management separates, Principal-agent Problem arises. This problem differs the goals of principal and agent, resulting in agency costs. In order to make agent’s actions consistent with the goal of owners, and reduce agency costs, business owners should establish an incentive system to monitor and encourage operators. Therefor, Managerial Ownership as a response to the agency costs of the incentive system, which has been widely recognized and promoted in the Western countries. From the Western practice, management shareholding system is considered to be one of the main countermeasures to solve this problem. In managerial ownership, the business operators are the owners, in order to achieve the convergence of interests between the two parties.Compared with foreign countries’situation, the institutional environment and market environment of Chinese listed companies were significantly different. As a result, correctly understanding the characteristics of managerial ownership plays an importance role in improving the governance of listed companies in China. In order to avoid the impact of China’s state-controlled non-market factors, in this essay, I chose SME listed companies as my study object, and357SME listed companies as study sample and empirical analysis as the main research methods.In this essay, I used principal-agent incentive theory, human resources theory and internal control theory for the analysis on the relationship of managerial ownership and the corporate performance, obtaining the following assumptions:(1) among all the SME listed companies, one with managerial ownership has better performance;(2) there are the range of effects between the proportion of managerial ownership and company performance.This article is divided into five parts:The first part is introduction, mainly Introducing the research background, research methods and the basic framework of this paper; the second part is literature review, mainly introducing the empirical analysis on the relationship of managerial ownership and the corporate performance, reviewing the current research status among domestic and foreign scholars, evaluating those research literature; the third part is theoretical analysis, describing the relating concepts of managerial ownership and the corporate performance, using principal-agent incentive theory, human resources theory and internal control theory for the analysis on the relationship of managerial ownership and the corporate performance; the fourth part is empirical analysis, all theory has been hypothesis tested, including sample selection, data sources, variable definitions and descriptions and use this sample data to make descriptive statistics and multiple linear regression analysis. The last part is the conclusion and suggestion, which is based on previous studies.