Data mining in the relation between ownership motivation and firm performance

Data mining, with its descriptive and predictive ability, can discover the hidden patterns of data from a large-scale data warehouse by precise mathematical means, which is helpful for decision making. With a panel data analysis, this paper examines the relation between managerial ownership and firm performance. Based on a sample of 75 public companies in south China, it is found that managerial ownership has no significant effect on firm performance, which shows controversy with extant studies. It is argued that alignment and entrenchment effect of ownership motivation on managers has not happened because of small number of internal ownership sharing. It can be proposed that Chinese listed companies should increase the extent of ownership motivation on top managers to release the problem of agency and principals.