A Study of Adjusting Speed of Insider Ownership in Chinese Listed Companies:Evidence from the Adjustment Cost Approach

摘要

A proper insider ownership proportion may incentive management level to make shareholder preference decision in the lower cost and increase corporate performance. It is possible to adjust insider ownership timely and optimize performance gradually by signing effective contract. However cost is needed by adjusting insider ownership, which is adjustment cost. It is necessary to analyze the influencing factors of adjustment cost and its effect on the speed of adjusting insider ownership. In this empirical study, the influence factors on adjusting speed of insider ownership of listed companies from 2003 to 2008 on the view of adjustment cost approach. The result was found that the adjustment speed of insider ownership is significantly positively associated with information asymmetry, significantly negatively associated with the number of insiders and market timing.