Top Managers' Ownership and Firm Performance in Parent Companies of Business Groups: An Empirical Study on Chinese Listed Firms

Business group, as a new form rather than markets or hierarchy organizations, showed significance in emerging markets and became a leading power to promote economic developing in these countries. Previous empirical studies show subsidiaries having better performance than parent companies in business groups. So this paper focused on ownership motivation on the top managers of parent companies and firm performance in business groups. The results show that in parent companies of Chinese business groups, there is a liner positive correlativity between the extent of top managerspsila ownership motivation and firm performance, which reflects the effect of convergence of interest. The founding does not support curved relation between managerial ownership and firm performance. The outcomes of this study will provide some advices for the system of governance and motivation, especially for parent companies, in Chinese business groups and can be used for reference by government to develop domestic business groups.