Simultaneous Determination of Managerial Ownership, Financial Leverage and Firm Value
Controlling for previous identified determinants and modeling managerial ownership,leverage and firm value as jointly endogenous, we use hi-tech firm-level panel data covering 139 firms from china stock market for 2002-2005 to examine simultaneously the determinants of managerial ownership, leverage, and firm value as a system of three equations. The empirical analysis shows a significant inverse relation between managerial ownership and leverage which reveal the existence of a substitution monitoring effect between debt and the managerial group. We contend that managers of firms with higher stock eschew choosing debt to minimize frequent external monitoring. Additionally,we document an inverse U-shaped relationship between Managerial ownership and firm value even if managerial ownership is endogenous. Finally, we also find that leverage and firm value are influenced jointly positively.Our analysis provides empirical supportive evidence for Chinese hi-tech firms to use managerial ownership and leverage to improve the corporate governance efficiency and firm value.
Managerial ownership financial leverage firm value simultaneous equations estimation
CAO Yanming
School of Acoounting,ShanXi University of Finance & Economics,P.R.China,030012
国际会议
2008 International Conference of Management Science and Engineering(2008管理科学与工程国际学术会议)
河南焦作
英文
113-118
2008-11-01（万方平台首次上网日期，不代表论文的发表时间）