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MANAGERIAL OWNERSHIP AND FIRM PERFORMANCE ON SELECTED JSE LISTED FIRMS

Sandisiwe Zondi, Mabutho Sibanda

DOI: 10.22495/cocv12i3c2p3

Abstract

This paper investigates if there is a relationship between managerial ownership and firm performance in selected firms listed on the JSE, and if so, what that relationship is. The study conducts regression analyses over a sample of 23 retail sector firms, observing data stretching from 2010 to 2013. The results are found to be robust. The results suggest that the hypothesis that a positive relationship exists between managerial ownership and performance be rejected as a negative relationship is found. Instead, the results of a two-stage least squares (2SLS) analysis find that managerial ownership does not impact firm performance in any direction. Overall the results of the study do not support the agency theory, as aligning the interests of managers and shareholders does not improve firm performance, at least within the retail sector.

Keywords: South Africa, Managerial Ownership, Endogeneity, Corporate Governance, Firm Performance

How to cite this paper: Zondi, S., & Sibanda, M. (2015). Managerial ownership and firm performance on selected JSE listed firms. Corporate Ownership & Control, 12(3-2), 233-241. http://doi.org/10.22495/cocv12i3c2p3

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