An Empirical Study on the Relation between the Management Shareholding and Company Performance based on the Theory of Ultimate Property Right

Abstract

This paper studies the relation between the management shareholding of non-financial state-owned listing companies in China and company performance, based on the views of Liu Shaojia and et al. (2003) on the ultimate property right theory. The empirical study results demonstrate the existence of a positive correlation between the management shareholding and company performance. This correlation becomes more apparent in the companies under governmental indirect holding than those under governmental direct holding. This paper further finds out that in the non-financial state-owned listing companies, there is a significant positive correlation between the company performance and the share proportion of the largest shareholder.