Why Managers Hold Shares of Their Firms: An Empirical Analysis



solely based on public information.

3.2 Robustness Checks

We employ several robustness checks to test the stability of our results. The
empirical results for all of these robustness checks can be found in Table 4.

+ + + Please insert TABLE 4 about here + + +

3.2.1 Difference Portfolios

Instead of looking at long-only portfolios, we now examine a strategy of going
long in managerial ownership portfolios and at the same time short in non-
managerial ownership portfolios. Thus, we re-estimate Model (1), where we
set R
b,t equal to the return of a value-weighted non-managerial ownership
portfolio. Although the results for the long-only strategy presented above
are already significant, we examine difference portfolios because this is a
standard approach in empirical asset pricing, allowing us to test the stability
of our results and to relate them to comparable studies also using long-short
portfolios. Results are presented in Panel A of Table 4.

They confirm our results for the long-only portfolios. Going long in the
5% cutoff (10% cutoff) portfolio and short in the non-managerial ownership
portfolio delivers abnormal annual returns of 7.81% (11.31%) that are statis-
tically significant at the 5% (1%) level. The extent of the abnormal returns
is very similar to that of the long-only strategies. This shows that investors
who are not allowed to short-sell could also fully profit from the abnormal
returns of managerial ownership firms in the past.

11



More intriguing information

1. Gender and aquaculture: sharing the benefits equitably
2. Literary criticism as such can perhaps be called the art of rereading.
3. Quelles politiques de développement durable au Mali et à Madagascar ?
4. The name is absent
5. Indirect Effects of Pesticide Regulation and the Food Quality Protection Act
6. The name is absent
7. Personal Experience: A Most Vicious and Limited Circle!? On the Role of Entrepreneurial Experience for Firm Survival
8. Synthesis and biological activity of α-galactosyl ceramide KRN7000 and galactosyl (α1→2) galactosyl ceramide
9. Do imputed education histories provide satisfactory results in fertility analysis in the Western German context?
10. Making International Human Rights Protection More Effective: A Rational-Choice Approach to the Effectiveness of Ius Standi Provisions
11. A Study of Adult 'Non-Singers' In Newfoundland
12. Estimating the Impact of Medication on Diabetics' Diet and Lifestyle Choices
13. Asymmetric transfer of the dynamic motion aftereffect between first- and second-order cues and among different second-order cues
14. The name is absent
15. AN ECONOMIC EVALUATION OF COTTON AND PEANUT RESEARCH IN SOUTHEASTERN UNITED STATES
16. References
17. Healthy state, worried workers: North Carolina in the world economy
18. The name is absent
19. Education and Development: The Issues and the Evidence
20. Migration and Technological Change in Rural Households: Complements or Substitutes?