Minimizing Entrepreneurs Financial Risks through Managerial Equity Ownership Investment: Insights from Manufacturing Firms in Emerging Economies

Abstract

Managerial ownership is a yardstick for entrepreneur ‘protection and business survival, motivating this study to investigate how managerial equity ownership investment minimizes entrepreneurs’ financial risks. The research uses a quantitative approach to obtain panel data from 576 listed manufacturing firms in twenty selected in emerging economies between 2001 and 2024. The research employed descriptive statistics and random-effects regression model for data analysis. Findings reveal that 5% and 10% managerial equity ownership investments significantly demonstrate lower entrepreneur financial risk in the emerging economies, implying that the executive members owning substantial amount of equity investment are directly responsible for the company's better performance, relieving the entrepreneurs from the burden of seeking for funding sources to ensure long-term financial stability of their businesses. This study concludes that managerial equity ownership investment reduces the entrepreneurs’ financial risks. The research recommend that the entrepreneurs should incorporate risk monitoring systems into executive evaluation frameworks to ensure that managerial equity ownership investment results in quantifiable financial stability outcomes.