This study provides the evidence on the impact of managerial ownership on the firm’s performance. It includes 140 non-financial firms of the manufacturing sector of Pakistan. For this purpose Pooled OLS technique is used. The impact of managerial ownership on the performance of the firms is undertaken. The study finds an evidence that managerial ownership exerts significant and positive influence on firm performance. The relationship revolves around the linear relationship of managerial ownership and firm performance by following convergence of interests (Incentive alignment theory). The results show that managerial ownership is an important instrument to reduce agency cost in case of manufacturing sector of Pakistan. Supervisor: Dr. Attiya Yasmin Javid