By using nearly 60,000 firm-years of Japanese firms from 2000 to 2017, we find that, in general, the relation between a firm’s managerial ownership and Tobin’s q is positive.The positive relation is robust to both measurement error and the influence of outliers, and it is due to the subset of young firms with high managerial ownership that have higher Tobin’s q. The general reduction in managerial ownership after an IPO is the primary factor contributing to the change in managerial ownership. When we restrict our sample to larger firms, a hump-shaped relation is observed, at which point our analysis is consistent with the prior literature on American firms. For firm-years in the low liquidity bracket, the relation is inversely hump-shaped and mostly negative. The firm-years in the low liquidity bracket have a different relation between managerial ownership and Tobin’s q compared to those in the high liquidity bracket, at which point American and Japanese firms are similar.

Time & Location

10 May 2024 | 2:15–3:45 p.m.

In-person & online
Business School | Thielallee 73 | Room 013
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