IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v58y2023ipas1544612323007110.html
   My bibliography  Save this article

Managerial ownership and the effectiveness of internal control

Author

Listed:
  • Liu, Yanmei

Abstract

This paper examines the impact of managerial ownership on the effectiveness of internal control in China's stock markets, focusing on the perspective of managerial ownership. The findings reveal a significant quadratic non-linear relationship, characterized by an inverted-U shape, between the level of managerial ownership and the effectiveness of internal control for the overall population of listed companies. Notably, the inverted U-shaped effect of managerial ownership on internal control is observed to be more delayed in non-state-owned listed companies. However, these companies exhibit a stronger incentive effect, and the 'Entrenchment Effects' become apparent at an earlier stage.

Suggested Citation

  • Liu, Yanmei, 2023. "Managerial ownership and the effectiveness of internal control," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323007110
    DOI: 10.1016/j.frl.2023.104339
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612323007110
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2023.104339?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hock-Doepgen, Marianne & Clauss, Thomas & Kraus, Sascha & Cheng, Cheng-Feng, 2021. "Knowledge management capabilities and organizational risk-taking for business model innovation in SMEs," Journal of Business Research, Elsevier, vol. 130(C), pages 683-697.
    2. Al-ahdal, Waleed M. & Alsamhi, Mohammed H. & Tabash, Mosab I. & Farhan, Najib H.S., 2020. "The impact of corporate governance on financial performance of Indian and GCC listed firms: An empirical investigation," Research in International Business and Finance, Elsevier, vol. 51(C).
    3. Kong, Dongmin & Piao, Yin & Zhang, Wenzhe & Liu, Chenhao & Zhao, Ying, 2023. "Trust and corporate social responsibility: Evidence from CEO’s early experience," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 585-596.
    4. Dongmin Kong & Chen Lin & Lai Wei & Jian Zhang, 2022. "Information Accessibility and Corporate Innovation," Management Science, INFORMS, vol. 68(11), pages 7837-7860, November.
    5. Yao, Shouyu & Pan, Yuying & Sensoy, Ahmet & Uddin, Gazi Salah & Cheng, Feiyang, 2021. "Green credit policy and firm performance: What we learn from China," Energy Economics, Elsevier, vol. 101(C).
    6. Ling Lei Lisic & Linda A. Myers & Timothy A. Seidel & Jian Zhou, 2019. "Does Audit Committee Accounting Expertise Help to Promote Audit Quality? Evidence from Auditor Reporting of Internal Control Weaknesses†," Contemporary Accounting Research, John Wiley & Sons, vol. 36(4), pages 2521-2553, December.
    7. Kong, Dongmin & Lin, Zhiyang & Wang, Yanan & Xiang, Junyi, 2021. "Natural disasters and analysts' earnings forecasts," Journal of Corporate Finance, Elsevier, vol. 66(C).
    8. Gong, Mengfeng & Gao, Yuan & Koh, Lenny & Sutcliffe, Charles & Cullen, John, 2019. "The role of customer awareness in promoting firm sustainability and sustainable supply chain management," International Journal of Production Economics, Elsevier, vol. 217(C), pages 88-96.
    9. Chang, Yu-Tzu & Chen, Hanchung & Cheng, Rainbow K. & Chi, Wuchun, 2019. "The impact of internal audit attributes on the effectiveness of internal control over operations and compliance," Journal of Contemporary Accounting and Economics, Elsevier, vol. 15(1), pages 1-19.
    10. Dai, Haifeng & Jiang, Bo & Hu, Xiaosong & Lin, Xianke & Wei, Xuezhe & Pecht, Michael, 2021. "Advanced battery management strategies for a sustainable energy future: Multilayer design concepts and research trends," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    11. Kokina, Julia & Blanchette, Shay, 2019. "Early evidence of digital labor in accounting: Innovation with Robotic Process Automation," International Journal of Accounting Information Systems, Elsevier, vol. 35(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ma, Wentao & Li, Wanyun, 2024. "Blockchain technology and internal control effectiveness," Finance Research Letters, Elsevier, vol. 64(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Yang & Zhang, Qianqian & Li, Jinda, 2023. "The informal hierarchy of board and stock price crash risk," Finance Research Letters, Elsevier, vol. 58(PC).
    2. Zhu, Ling & Liu, Shasha & Kong, Dongmin, 2023. "Governments' fiscal stress and firm decentralization," International Review of Financial Analysis, Elsevier, vol. 90(C).
    3. Wang, Xinyi & Zhu, Ling, 2023. "How does export VAT rebates policy affect corporate investment efficiency? Evidence from corporate tax stickiness," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    4. Oliver Henk, 2020. "Internal control through the lens of institutional work: a systematic literature review," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(3), pages 239-273, September.
    5. Ning, Shuying & Lin, Zhiyang, 2023. "Effect of accounting information manipulation on innovation: Evidence from China," Emerging Markets Review, Elsevier, vol. 56(C).
    6. Imran Abbas Jadoon & Umara Noreen & Usman Ayub & Muhammad Tahir & Naima Shahzadi, 2021. "The Impact of Family Ownership on Quality and Disclosure of Internal Control in Pakistan," Sustainability, MDPI, vol. 13(16), pages 1-16, August.
    7. Hu, Yi & Jin, Shuchang & Ni, Juan & Peng, Kai & Zhang, Lei, 2023. "Strategic or substantive green innovation: How do non-green firms respond to green credit policy?," Economic Modelling, Elsevier, vol. 126(C).
    8. Dong, Zhenlin & Li, Hong, 2023. "The impact of Confucianism on the efficiency of enterprises green innovation," Finance Research Letters, Elsevier, vol. 58(PA).
    9. Liu, Lihua & Weng, Danyan & Zhang, Qin, 2023. "Unintended consequences of tax enforcement on corporate innovation: Evidence from a natural experiment in China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1292-1309.
    10. Zhao, Xiaomeng & Chen, Yinna & Si, Deng-Kui & Jiang, Cun-Yuan, 2024. "How does environmental legislation affect enterprise investment preferences? A quasi-natural experiment based on China's new environmental protection law," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 834-855.
    11. Fan, Wenjun & Zhu, Jiangong & Qiao, Dongdong & Jiang, Bo & Wang, Xueyuan & Wei, Xuezhe & Dai, Haifeng, 2024. "Prediction of nonlinear degradation knee-point and remaining useful life for lithium-ion batteries using relaxation voltage," Energy, Elsevier, vol. 294(C).
    12. Liu, Duan & Yu, Nizhou & Wan, Hong, 2022. "Does water rights trading affect corporate investment? The role of resource allocation and risk mitigation channels," Economic Modelling, Elsevier, vol. 117(C).
    13. Boubaker, Sabri & Liu, Pei-Zhi & Ren, Yi-Shuai & Ma, Chao-Qun, 2024. "Do anti-corruption campaigns affect corporate environmental responsibility? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    14. Guo, Shu & Zhang, ZhongXiang, 2023. "Green credit policy and total factor productivity: Evidence from Chinese listed companies," Energy Economics, Elsevier, vol. 128(C).
    15. Gu, Leilei & Liu, Zhongyang & Xu, Danyang, 2023. "The risk-mitigating role of corporate social responsibility in Chinese listed heavy-polluting companies: An extreme event experience perspective," Energy Economics, Elsevier, vol. 125(C).
    16. Zhao, Xing & Li, Xiangqian & He, Zhuoyi & Shi, Ruoying, 2024. "The relationship between the acquisition of corporate credit and the gender of executives: Evidence from developing countries," Finance Research Letters, Elsevier, vol. 62(PA).
    17. Tan, Xiujie & Yan, Yaxue & Dong, Yuyang, 2022. "Peer effect in green credit induced green innovation: An empirical study from China's Green Credit Guidelines," Resources Policy, Elsevier, vol. 76(C).
    18. Florentina Melnic & Daniel Juravle, 2020. "Governance And Access To Finance," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 25, pages 151-168, June.
    19. Wasswa Asaph Senoga, 2023. "The Effect of Accountability, Transparency, And Integrity of Church Leaders on Fraud Prevention in The Management of Church Funds," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(1), pages 1388-1409, January.
    20. Liu, Shasha & Wu, Yuhuan & Kong, Gaowen, 2024. "Politics and Robots," International Review of Financial Analysis, Elsevier, vol. 91(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323007110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.