Structural Models and Endogeneity in Corporate Finance : the Link Between Managerial Ownership and Corporate Performance

  title={Structural Models and Endogeneity in Corporate Finance : the Link Between Managerial Ownership and Corporate Performance},
  author={Jeffrey M. Coles and Michael Lemmon and Felix Meschke},
This paper presents a parsimonious, structural model that isolates primary economic determinants of the level and dispersion of managerial ownership, firm scale, and performance and the empirical associations among them. In particular, variation across firms and through time of estimated productivity parameters for physical assets and managerial input and corresponding variation in optimal compensation contract and firm size combine to deliver the well-known hump-shaped relation between Tobin’s… CONTINUE READING
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