MANAGERIAL OWNERSHIP AND MARKET-BASED PERFORMANCE INDICATORS: EXTENDED AGENCY THEORY

Abstract

Our study empirically investigates the relationship between managerial ownership and company performance of public listed companies in Malaysia. Three years panel data of 730 Malaysian public listed companies were examined. Our findings demonstrated that managerial ownership had negative and significant relationship with Tobin’s Q and share price. Therefore, the involvement of management in monitoring and controlling activities fail to reduce agency conflict in the emerging economy. This study is perhaps the first that explain the extended agency theory in developing country.