Managerial Alignment versus Entrenchment Effects on Firm Performance in Australia

Singhchawla, Wanachan; Evans, Robert; Evans, John; Rajabhat, S.

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Access Status

Open access

Authors

Singhchawla, Wanachan

Evans, Robert

Evans, John

Rajabhat, S.

Date

2011

Type

Journal Article

Metadata

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Citation

Singhchawla, Wanachan and Rajabhat, Suan Dusit and Evans, Robert T. and Evans, John P. 2011. Managerial Alignment versus Entrenchment Effects on Firm Performance in Australia. Academy of Taiwan Business Management Review. 7 (1): pp. 24-35.

Source Title

Academy of Taiwan Business Management Review

ISSN

18130534

School

Graduate School of Business

URI

http://hdl.handle.net/20.500.11937/11448

Collection

Curtin Research Publications

Abstract

This study investigates whether managerial share ownership serve to enjhance or detract from firm performance in listed companies in Australia. The results support both the 'convergence of interest' and 'entrenchment' hypotheses and therefore, the existence of a non-linear relationship between firm performance and managerial ownership. A cubic relationship is found to exist for Australian data, namely convergence to entrenchment to convergence, with maximum and minimum points occurring at approximately 12% and 58% of executive directors' shareholdings, respectively.