Management Ownership and Corporate Performance: Empirical Evidence from Private Listed Firms in China

Management ownership have two contrary effects on corporate performance, the convergence of interest effect and the entrenchment effect. Using a sample of private listed firms during 2002 to 2005, we investigate the relationship between management ownership and corporate performance. We find that the proportion of management ownership is positive associated with Tobin's q, and there is no reverse U relationship between management ownership and corporate performance. In summary, our results support for the convergence of interest effect.