Journal of Financial Economics Vol. 62 No. 3 2001
Understanding the determinants of managerial ownership and the link between ownership and performance: comment
Abstract
Himmelberg et al. (J. Financial Econom. 53 (1999) 353–384) argue that fixed effects estimators should be used in examination of the relationship between managerial ownership and firm performance. I show that managerial ownership, while substantially different across firms, typically changes slowly from year to year within a company. With rational managers maximising long-term utility, small, one-year changes in ownership are not likely to reflect notable changes in incentives that would lead to substantive within-year changes in performance. By relying on within variation, fixed effects estimators may not detect an effect of ownership on performance even if one exists.
- DOI
- 10.1016/s0304-405x(01)00085-x
- Volume
- 62
- Issue
- 3
- Pages
- 559-571
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref