Insider shareholdings and firm performance: the case of companies quoted at Nairobi Stock Exchange
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Date
2006Author
Munywoki, M.Patricia
Type
ThesisLanguage
enMetadata
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This paper has sought to establish whether there IS a relationship between insider shareholdings and finn performance. It measures the effects of insider ownership using a measure of firm performance, namely return on equity. The paper applies the insider ownership model on publicly listed firms at the Nairobi Stock Exchange.
The insider ownership model provides results that support a cubic relationship between insider ownership and firm performance. This confirms that managerial entrenchment has an unambiguous negative effect on firm performance as measured by return on equity, and that the wealth effect of insider ownership is unambiguously positive. This evidence is consistent with both the convergence of interest and entrenchment effect hypotheses. Overall results indicate that insider ownership has a positive impact on firm performance
Citation
A Management Research Project Report Submitted in Partial Fulfillment for the Requirements of the Degree of Masters of Business Administration (MBA), School Of Business, University Of NairobiPublisher
Business Administration