Managerial ownership concentration and agency conflict using logistic regression approach : evidence from Bursa Malaysia

Ali Ahmed, Huson Joher 2009, Managerial ownership concentration and agency conflict using logistic regression approach : evidence from Bursa Malaysia, Journal of management research, vol. 1, no. 1, pp. 1-10.

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Title Managerial ownership concentration and agency conflict using logistic regression approach : evidence from Bursa Malaysia
Author(s) Ali Ahmed, Huson Joher
Journal name Journal of management research
Volume number 1
Issue number 1
Start page 1
End page 10
Total pages 10
Publisher Macrothink Institute, Inc.
Place of publication Las Vegas, Nev.
Publication date 2009
ISSN 1941-899X
Keyword(s) managerial ownership
agency conflict
logistic regression
Summary This paper adopted logistic regression model to examine the relationship between level of managerial ownership concentration and agency conflict which are proxied by level of risk, firms leverage and firms dividend policy. The study covers a period of 5 years from 1997 through 2001. The study is based on the 100 blue-chip stocks, majority of which are derived from CI components. The findings suggest a positive and significant association between level of level of risk at lower level and managerial ownership while a negative and significant association is also evidenced between risk at higher level and managerial ownership concentration. While debt policy which serves as positive monitoring substitute for agency conflict is found to be positive and significant explaining the level of ownership concentration. Furthermore, dividend policies, which also serve as monitoring, substitute to reduce agency conflict between manager and external shareholders do not appear to have any significant impact on managerial ownership. On the other hand, the level of institutional ownership, which serves as external monitoring force, is found to have inverse impact on level of managerial ownership concentration. This is marginally significant at 10 level (p=.12). The findings, in part explain the argument that the managerial ownership help reduce agency conflict between outside equity holders and managers.
Language eng
Field of Research 150303 Corporate Governance and Stakeholder Engagement
Socio Economic Objective 910206 Market-Based Mechanisms
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©2009, Macrothink Institute
Persistent URL http://hdl.handle.net/10536/DRO/DU:30023763

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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