Managerial Ownership and Stock Price Volatility: The Moderating Role of Corporate Transparency in China

Abstract

This paper aims to investigate the impact of managerial ownership on the stock price volatility in China by considering corporate transparency as a mediator. By analyzing data from 558 Chinese listed companies between 2016 and 2020, empirical results from a multiple linear regression model show a positive correlation between managerial ownership and corporate transparency. The results also provide the evidence that the negative correlation between managerial ownership and stock volatility is more (less) pronounced in companies with less (more) transparency. Enterprises should cooperate with financial analysts to increase corporate transparency. Individual investors can analyze the market performance by examining the company's equity structure, the number of cooperative analysts, and the number of research reports so as to provide more reliable basis for investment.