The Direction of Causality between Insider Ownership and Market Valuation

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dc.contributor.author	Pedersen, Torben	en_US
dc.contributor.author	Thomsen, Steen	en_US
dc.contributor.author	Kvist, Hans Kurt	en_US
dc.date.accessioned	2009-02-04T10:25:25Z
dc.date.available	2009-02-04T10:25:25Z
dc.date.issued	2001-09-19T00:00:00Z	en_US
dc.identifier.uri	http://hdl.handle.net/10398/6900
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
dc.publisher.city	København	en_US
dc.publisher.year	2001	en_US