ABSTRAKThe purpose of research is to analyze an impact of managerial stock ownership structure on corporate bond returns. This study suggesteThe purpose of research is to analyze an impact of managerial stock ownership
structure on corporate bond returns. It is assumed that the change in managerial
stock ownerships can influence managers' attitudes toward risk. So it is hypothesized
that the change in managerial stock ownerships can influence corporate bond returns.
This study suggested that there is a significant impact of managerial ownership
structure on corporate bond returns. In 1998-1999 time series cross-section of31
corporatf. bonds that were listed on Surabaya Stock Exchange, I've found evidence
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of a significant non-monotonic relationship between managerial stock ownership
and corporate bond returns. Bond returns first increase, then decrease, and finally
rise slightly as ownership by manager rises.
There is also weak evidence of a non-monotonic relationship between managerial
stock ownership and firm leverage. This study finds a positive relation between
managerial stock ownership and leverage up to 19.9 percent ownership level. When
ownership increases more (over 19.9 percent), however, the relationship becomes
negative. This empirical evidence indicates that greater managerial ownership gives
managers an incentive to decrease risk by using low level of debt.d that there is a significant impact of managerial ownership structure on corporate bond returns.
