Were the good old days that good? Changes in managerial stock ownership since the great depression

We document that ownership by officers and directors of publicly traded fir ms is on average higher today than earlier in the century. Managerial owner ship has risen from 13 percent for the universe of exchange-listed corporat ions in 1935, the earliest year for which such data exist, to 21 percent in 1995. We examine in detail the robustness of the increase and explore hypo theses to explain it. Higher managerial ownership has not substituted for a lternative corporate governance mechanisms. Lower volatility and greater he dging opportunities associated with the development of financial markets ap pear to be important factors explaining the increase in managerial ownershi p.