The Effect of Managerial Education and Firm-Ownership Structure

The interacting and feedback effects between human capital and performance in Chinese publicly listed companies are studied. Specifically, managerial education attainment is examined to see if it helps to improve firm performance. The effect and efficiency of managerial human capital within different firm-ownership structures is investigated. It is found that a manager's educational level generates a positive effect on the firm's operating and market performance, consistent with classic human capital theory. In addition, research suggests that dominant state control can be detrimental to the contribution margin of managerial human capital. The existence of powerful large minority shareholders, however, exerts a positive effect. Other institutional aspects of the Chinese transitional economy and their potential impacts on managerial education effect are also discussed based on empirical findings.