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Existing literature on the relation between management ownership and firm value has provided competing hypotheses and conflicting evidence. Using samples of Fortune 500‐sized firms in 1976, 1980 and 1984, we find that corporate value measured by Tobin's q is a function of management ownership. Specifically, the q rises when management ownership is between 0% and 5‐7%, and falls as the ownership increases to 10‐12%. Beyond this range, we find that the q continues to fall in the 1976 sample, and starts to rise in the 1980 and 1984 samples. The evidence supports the hypothesis that there is a nonmonotonic relation between management ownership and corporate value.

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A simultaneous equations model in which crime is a function of the probabillty of conviction, penalty, gross yield, and socioeconomic variables is presented and tested for the crimes of robbery and burglary. The cross-section data used from 31 states for 1970 support the hypotheses that crime rates fall when the severity and certainty of punishment are increased and the gross gain from the crime is decreased. The results reported are consistent with those of previous investigators. However, the current study uses homeowners insurance claims as a proxy for the gross gain from robberies and burglaries. While imperfect, this measure is more direct than those used by most previous investigators. As a result, the present study provides more direct support for the hypothesis that thieves respond to the amount available for stealing.

No abstract