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The Impact of Managerial Ownership of Shares and Options on the European Company’s Value
Shares and stock shares are considered to be one of the incentives for companies' CEOs. However, managerial ownership with including stock options has unclear associations with company's value in different countries. This ambiguous relationship is due to holding different corporate governance systems by European firms. The especial purpose of this study is to find the functional dependence between directors' ownership with including stock options and firm performance in various European corporate governance systems and to investigate the most significant of them. This research is specified on the both samples of the UK and Continental European listed companies over the period from 2008 to 2013. The study estimated both linear and nonlinear functional dependences with the application of OLS and FE estimation. According to the results of this research, there is a difference between European corporate governance systems. Moreover, there were found out an U-shaped dependence between managerial ownership and firm value in the context of both systems, while the stock options value has negative and has not any statistical significant influence on UK and Continental European firms correspondingly. The findings of the current paper gain the significance of the external institutional and private investors, independent directors and general directors of the companies under the Continental and the Anglo-Saxon corporate governance systems.