Beschreibung

This paper studies the effect of managerial ownership on performance and the determinants of managerial ownership for small and medium - sized private companies. We use a panel of around 1300 firms in the German business - related service sector for the years 1997 - 2000. Managerial ownership up to around 80 per cent has a positive impact on firm performance (incentive effect), for higher shares the effect becomes negative (entrenchment effect). Moreover, risk - aversion of managers and signalling of firm quality leads to a non - linear relationship between managerial ownership and the risk exposure of a firm. The determinants of performance and ownership are estimated simultaneously. (Author's abstract, IAB-Doku) ((en))