Managerial ownership and financial distress: evidence from the Chinese stock market

Simple item page
dc.contributor.authorShan, Y.G.
dc.contributor.authorTroshani, I.
dc.contributor.authorWang, J.
dc.contributor.authorZhang, L.
dc.date.issued2024
dc.descriptionArticle publication date: 22 May 2023
dc.description.abstractPurpose – This study investigates the convergence-of-interest and entrenchment effects on the relationship between managerial ownership and financial distress using evidence from the Chinese stock market. It also analyzes whether the relationship is mediated by research and development (R&D) investment. Design/methodology/approach – Using a dataset consisting of 19,059 firm-year observations of Chinese listed companies in the Shanghai and Shenzhen Stock Exchanges between 2010 and 2020, this study employs both piecewise and curvilinear models. Findings – The results indicate that managerial ownership has a negative association with firm financial distress in both the low (below 12%) and high (above 18%) convergence-of-interest regions of managerial ownership, suggesting that managerial ownership in this region may contribute to improve firm financial status. Meanwhile, managerial ownership has a positive association with firm financial distress in the entrenchment region (12–18%), implying that managerial ownership in the entrenchment region may contribute to impair firm financial status. Furthermore, the results show that R&D investment mediates the association between managerial ownership and financial distress. Originality/value – This study is the first to provide evidence of a nonlinear relationship between managerial ownership and financial distress, and identify the entrenchment region in the Chinese setting.
dc.description.statementofresponsibilityYuan George Shan, Indrit Troshani, Jimin Wang, Lu Zhang
dc.identifier.citationInternational Journal of Managerial Finance, 2024; 20(1):192-221
dc.identifier.doi10.1108/ijmf-06-2022-0270
dc.identifier.issn1743-9132
dc.identifier.issn1758-6569
dc.identifier.orcidTroshani, I. [0000-0002-4266-2833]
dc.identifier.urihttps://hdl.handle.net/2440/138731
dc.language.isoen
dc.publisherEmerald
dc.rights© 2023 Emerald Publishing Limited
dc.source.urihttps://doi.org/10.1108/ijmf-06-2022-0270
dc.subjectManagerial ownership; Financial distress; R&D investment; China
dc.titleManagerial ownership and financial distress: evidence from the Chinese stock market
dc.typeJournal article
pubs.publication-statusPublished

Files

Collections

Business School publications