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Do ownership structures affect the risk incentive provided by managerial portfolio holdings? An empirical analysis of UK alternative investment market companies

Pinto, Helena (2010) Do ownership structures affect the risk incentive provided by managerial portfolio holdings? An empirical analysis of UK alternative investment market companies. In: EFMA 2010, 2010-01-01, Aarhus, Denmark.

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Abstract

This paper analyzes the wealth and risk incentive effects of managerial options and shareholdings on the hedging probability of UK listed Alternative Investment Market (AIM) companies. We find that the wealth incentive effect provided by managerial option holdings increases the hedging likelihood. On the contrary, the wealth incentive effect provided by managerial shareholdings decreases the hedging likelihood. Further tests show that the incentive effect provided by managerial shareholdings is significantly different if managers are not substantial shareholders of the company. Managers with substantial ownership are significantly less risk averse. Thus, the size and ownership structure characteristics of AIM companies seem to result in similarities between managers‟ and owners‟ behavior.

Item type: Conference or Workshop Item (Paper)
ID code: 28023
Keywords: risk, ownership, managerial portfolio, alternative investment market companies, Finance
Subjects: Social Sciences > Finance
Department: Strathclyde Business School > Accounting and Finance
Depositing user: Miss Donna McDougall
Date Deposited: 28 Jul 2011 13:41
Last modified: 23 Jul 2015 13:31
Related URLs:
URI: http://strathprints.strath.ac.uk/id/eprint/28023

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