The Direction of Causality between Insider Ownership and Market Valuation


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The Direction of Causality between Insider Ownership and Market Valuation

Vis færre oplysninger Pedersen, Torben en_US Thomsen, Steen en_US Kvist, Hans Kurt en_US 2009-02-04T10:25:25Z 2009-02-04T10:25:25Z 2001-09-19T00:00:00Z en_US
dc.description.abstract The causal relationship between insider ownership and market valuation is tested on a database of the largest EU and US companies. Using a Granger causality test insider ownership (measured by the fraction of closely held shares) is found to have a negative effect on market valuation (measured as the simple Tobin's Q ratio). And market valuation is found to have a negative effect on insider ownership. Consistent with an overall non-linear relationship as hypothesised by Morck et al. (1988) and Stultz (1988), the negative effect from insider ownership to performance is found to be significant only for companies with high initial levels of insider ownership, but insignificant for companies with low initial concentration levels. Furthermore, the effect on market valuation turns out to depend on system affiliation: it is only significant in continental Europe where average insider ownership is much higher than in the Anglo-American world (UK and US). en_US
dc.format.extent 31 s. en_US
dc.language eng en_US
dc.relation.ispartofseries LINK Working paper;2001-18 en_US
dc.subject.other værdiansættelse-virksomheder en_US
dc.subject.other virksomhedens ejerskab en_US
dc.subject.other market valuation en_US
dc.title The Direction of Causality between Insider Ownership and Market Valuation en_US
dc.type wp en_US
dc.accessionstatus KAT01sep19 inru en_US
dc.contributor.corporation Copenhagen Business School. CBS
dc.contributor.department Statistikgruppen en_US
dc.contributor.department Institut for International Økonomi og Virksomhedsledelse en_US
dc.contributor.departmentshort LINK en_US
dc.contributor.departmentshort INT
dc.contributor.departmentshort CST
dc.contributor.departmentuk Statistics Group en_US
dc.contributor.departmentuk Department of International Economics and Management en_US
dc.contributor.departmentukshort INT
dc.contributor.departmentukshort CST
dc.idnumber x656100949 en_US København en_US
dc.publisher.year 2001 en_US

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