Academic literature on the topic 'Equity Agency Costs'
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Journal articles on the topic "Equity Agency Costs"
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Sackley, William H. "Agency Costs of Overvalued Equity." CFA Digest 35, no. 4 (November 2005): 91. http://dx.doi.org/10.2469/dig.v35.n4.1790.
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Pantzalis, Christos, and Jung Chul Park. "Agency Costs and Equity Mispricing." Asia-Pacific Journal of Financial Studies 43, no. 1 (February 2014): 89–123. http://dx.doi.org/10.1111/ajfs.12041.
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Jensen, Michael C. "Agency Costs of Overvalued Equity." Financial Management 34, no. 1 (March 2005): 5–19. http://dx.doi.org/10.1111/j.1755-053x.2005.tb00090.x.
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Aarstol, Michael. "Inflation, agency costs, and equity returns." Journal of Economics and Business 52, no. 5 (September 2000): 387–403. http://dx.doi.org/10.1016/s0148-6195(00)00030-8.
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McMahon, Richard G. P. "Equity Agency Costs Amongst Manufacturing SMEs." Small Business Economics 22, no. 2 (March 2004): 121–40. http://dx.doi.org/10.1023/b:sbej.0000014452.12852.3f.
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Liu, Chia-Ying, Shiu-Chen Huang, and Shieh-Liang Chen. "The Effects of Agency Costs and Insiders’ Shareholdings on Financing Choices." Asian Journal of Finance & Accounting 8, no. 1 (April 16, 2016): 127. http://dx.doi.org/10.5296/ajfa.v8i1.9288.
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<p><span style="font-size: medium;">This paper investigates the effects of debt agency cost and equity </span><span style="font-size: medium;">agency cost of current and prior periods on the financing choices of long-term debts, seasoned equity offering, and private equity financings. It also examines the effects of the shareholdings of insiders on the association between both debt and equity agency costs and the choice of financing methods. </span></p>The findings show that both prior and current debt agency costs are positively related to seasoned equity offerings of current period, and both prior and current debt agency costs are positively related to private equity financing of current period regardless of whether the models consider the factor of insiders’ shareholdings. As for equity agency cost, the document indicate that both current and prior equity agency costs are negatively related to current seasoned equity offerings, however, only prior equity agency costs are negatively related to current seasoned equity offerings under considering shareholdings of insiders. Moreover, the shareholdings of insiders would affect the positive association between the corporate debt agency cost and seasoned equity offerings and the positive association between the corporate equity agency cost and debt financing.
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Nobanee, Haitham, and Jaya Abraham. "The impact of free cash flow, equity concentration and agency costs on firm’s profitability." Investment Management and Financial Innovations 14, no. 2 (June 1, 2017): 19–26. http://dx.doi.org/10.21511/imfi.14(2).2017.02.
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This paper examines how free cash flow and equity concentration are associated with agency costs, and how they influence the profitability of insurance firms listed on the Saudi Stock Market. The results indicate that equity concentration has no significant impact on agency costs, free cash flow has no significant impact on agency costs and agency costs have no significant impact on firm’s profitability. The findings of this study do not show any evidence to support the agency theory among insurance firms listed on the Saudi Stock Market.
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Kontuš, Eleonora. "Agency costs, capital structure and corporate performance." Ekonomski vjesnik 34, no. 1 (2021): 73–85. http://dx.doi.org/10.51680/ev.34.1.6.
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Purpose: The aim of this study is, first to describe and explore equity agency costs; second, to explore the impact of capital structure on equity agency costs; and finally, to examine the impact of agency costs on the performance of listed companies. Methodology: Panel data regression has been used for research data analysis. Results: The results of the work show that equity to capital and long-term debt to capital variables have a positive and significant impact on the agency costs of listed companies in the Republic of Croatia. The study indicates that long-term debt to capital variable has a negative and significant impact on the agency costs of listed companies in Slovenia and the Czech Republic. Furthermore, we find evidence to suggest that changes in agency costs have little or no effect on the performance of listed companies in Croatia, Slovenia and the Czech Republic. The findings suggest that the capital structure decisions affect the agency costs of listed companies and the agency costs may affect corporate performance. Conclusion: This study makes a number of contributions to the agency costs literature. It presents the first study of agency costs of listed companies in Croatia, Slovenia and the Czech Republic that uses panel data, a technique that enables us to isolate both cross section and time series effects. The present paper can help managers to better understand equity agency costs and their effects on corporate performance.
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Nobanee, Haitham, Nejla Ould Daoud Ellili, and Jaya Abraham. "Equity Concentration, Agency Costs and Performance of Non-financial Firms Listed on the Saudi Stock Exchange (Tadawul)." Global Business Review 18, no. 2 (March 9, 2017): 379–87. http://dx.doi.org/10.1177/0972150916668606.
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This article examines the association between the equity concentration and agency costs as well as the impact of agency costs on performance of non-financial firms listed on the Saudi Stock Exchange (Tadawul). These relations are examined by using dynamic panel data and a two-step robust system estimation for the period 2010–2013. The study uses three proxy variables to measure agency costs. The results show that the equity concentration has no significant impact on agency costs, and the agency costs have no significant impact on firms’ performance. In addition, the study shows no evidence to support the agency theory in non-financial firms listed on the Saudi Stock Exchange (Tadawul). This study provides a better understanding of the association between equity concentration, agency costs and a firm’s performance.
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Meuleman, Miguel, Mike Wright, Sophie Manigart, and Andy Lockett. "Private Equity Syndication: Agency Costs, Reputation and Collaboration." Journal of Business Finance & Accounting 36, no. 5-6 (June 2009): 616–44. http://dx.doi.org/10.1111/j.1468-5957.2009.02124.x.
Full textDissertations / Theses on the topic "Equity Agency Costs"
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Junker, Lukas. "Equity carveouts, agency costs, and firm value /." Wiesbaden : Dt. Univ.-Verl, 2005. http://www.gbv.de/dms/zbw/497325225.pdf.
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Truong, Thanh, and thanh truong@rmit edu au. "Corporate Ownership, Equity Agency Costs and Dividend Policy: An Empirical Analysis." RMIT University. Economics, Finance and Marketing, 2008. http://adt.lib.rmit.edu.au/adt/public/adt-VIT20080528.094747.
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Equity agency costs are important to the firm and the management of these costs is a critical element of corporate governance, yet empirical research that focuses on the magnitude and impact of agency costs is limited. This thesis sets out to furnish empirical evidence in the area of corporate ownership with a particular focus on the magnitude of equity agency costs as well as the relation that exists between the largest shareholder in a firm and equity agency costs and between the largest shareholder and the dividend policy that a firm adopts. This thesis provides an empirical analysis of the effect of corporate ownership, together with other governance mechanisms on equity agency conflicts for the largest 500 Australian listed firms. The results from this analysis provide strong support for the view that equity agency costs are related to corporate ownership. Specifically, there is evidence of a significant non-linear relation between inside ownership and the proxies for agency costs. Further, the results demonstrate that other governance mechanisms, particularly board size, board leadership and short-term debt financing, are effective in improving the use of firm assets, yet they do not seem to restrain firm management from incurring excessive discretionary operating expenses. This thesis also extends the investigation of the corporate ownership-equity agency cost relation by focusing on the largest shareholder for 9,165 listed firms drawn from 43 countries around the world. The results suggest that cross-sectional variation in equity agency costs can be partly attributable to corporate ownership. Specifically, there is evidence of a statistically significant non-linear relation between the shareholding of the largest shareholder and the agency cost proxies. The type of the largest shareholder, i.e. whether the largest shareholder is an insider or a financial institution, is also important in analysis of this relation. Further, debt financing, dividend policy and legal origin vary in their impact on the agency cost proxies. This thesis also investigates the interaction between the largest shareholder and dividend policy for 8,279 listed firms drawn from 37 countries around the world. Consistent with previous studies, the results suggest that firms are more likely to pay dividends when profitability is high, debt is low, investment opportunities are limited, or when the largest shareholder is not an insider. It is also apparent that largest shareholding and dividend payout are related and that, consistent with the extant literature, legal system does matter in dividend policy decisions. Together, the results imply that equity agency costs vary with corporate ownership though this relation remains, of course, the subject of continuing investigation in finance. A major contribution of this thesis is demonstrating that corporate ownership, particularly the largest shareholder, plays a pivotal role in controlling agency costs. Accordingly, this suggests the following policy implication: by improving the legal environment and regulatory constraints imposed on large shareholders as well as legal protection for minority shareholders, the efficiency gains generated from large shareholder control can be translated into higher firm valuation to the benefit of all shareholders in the firm.
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Hijazi, Bassem. "Bank Loans as a Financial Discipline: A Direct Agency Cost of Equity Perspective." Thesis, University of North Texas, 2006. https://digital.library.unt.edu/ark:/67531/metadc5411/.
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In a 2004 study, Harvey, Lin and Roper argue that debt makers with a commitment to monitoring can create value for outside shareholders whenever information asymmetry and agency costs are pronounced. I investigate Harvey, Lin and Roper's claim for bank loans by empirically testing the effect of information asymmetry and direct agency costs on the abnormal returns of the borrowers' stock around the announcement of bank loans. I divide my study into two main sections. The first section tests whether three proxies of the direct agency costs of equity are equally significant in measuring the direct costs associated with outside equity agency problems. I find that the asset utilization ratio proxy is the most statistically significant proxy of the direct agency costs of equity using a Chow F-test statistic. The second main section of my dissertation includes and event study and a cross-sectional analysis. The event study results document significant and positive average abnormal returns of 1.01% for the borrowers' stock on the announcement day of bank loans. In the cross sectional analysis of the borrowers' average abnormal stock returns, I find that higher quality and more reputable banks/lenders provide a reliable certification to the capital market about the low level of the borrowers' direct agency costs of equity and information asymmetry. This certification hypothesis holds only for renewed bank loans. In other words, in renewing the borrowers' line of credit, the bank/lender is actually confirming that the borrower has a low level of information asymmetry and direct costs of equity. Given such a certificate from the banks/lenders, shareholders reward the company/borrower by bidding the share price up in the capital market.
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Park, Jung Chul. "Two essays on market efficiency : tests of idiosyncratic risk: informed trading versus noise and arbitrage risk, and agency costs and the underlying causes of mispricing: information asymmetry versus conflict of interests." [Tampa, Fla.] : University of South Florida, 2007. http://purl.fcla.edu/usf/dc/et/SFE0001944.
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Dissertation (Ph.D.)--University of South Florida, 2007.Document formatted into pages; contains 100 pages. Title from PDF of title page. Includes vita. Includes bibliographical references. Mode of access: World Wide Web.
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Amini, Moghadam Shahram. "Two Essays on Competition, Corporate Investments, and Corporate Earnings." Diss., Virginia Tech, 2018. http://hdl.handle.net/10919/82851.
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The general focus of my dissertation, which consists of two essays, is on how changes in the financial and economic environment surrounding a firm affect managerial incentives and firm policies regarding investment in physical capital, innovation, equity offerings, and repurchases. The first essay in my dissertation examines how product market competition affects firms' investment decisions. While competition among firms benefits consumers via lower prices, greater product variety, higher product quality, and greater innovation, recent studies provide evidence that competition has been declining in the U.S. economy over the past decade. The evidence shows that American firms' profits are at near-record levels relative to GDP and are persistent. Industries have become more concentrated as a result of mergers and acquisitions, and barriers to entry have risen and the rate of new entry has been declining for decades. Taking these findings at face value, we examine empirically whether companies feel less compelled to invest in physical capital and in research and development because they face fewer threats from rival firms.
Using both traditional proxies and recently developed text-based measures of industry concentration, we show that firms operating in competitive industries invest significantly more in both physical capital and research and development relative to their peers in concentrated industries. We also report that the propensity to invest less by managers of monopolistic firms is partially mitigated by superior corporate governance that reduces the agency problem, and by certain product market characteristics such as low pricing power and low product differentiation/entry barriers. However, after accounting for all these mitigating factors, the negative association between industry concentration and investment persists. Our results are robust to including various control variables and exclusion of firms from industries that face significant competition from imports. The results are also robust to controlling for endogeneity caused by missing time-invariant and time-varying industry level factors that could potentially be related to both the level of concentration and investments.
Overall, our results are consistent with the notion that firms in competitive industries have a greater incentive to invest and innovate to survive and thrive in a competitive environment relative to the managers of the firms in more concentrated industries whose incentive to invest and innovate is to maintain their monopoly rents. Our findings have obvious policy implications in that investment and hence economic growth is being adversely affected in the current era of increasing industry concentration and declining competition.
The second essay in my dissertation investigates whether information contained in equity issues and buybacks is fully incorporated into prices such that the market reaction to subsequent earnings announcements is unrelated to those corporate actions. Korajczyk at al. (1991) argue that firms prefer to issue equity when the market is most informed about the quality of the firm to prevent adverse selection costs associated with new equity issues. This implies that equity issues tend to follow credible information releases contained in earnings announcements. However, analyzing a sample of 19,466 SEO pricing dates between 1970 and 2015 and 15,106 buyback announcements between 1994 and 2015 shows that a considerable number of equity offerings and repurchase announcements take place before the announcement of earnings. About 28% of buybacks and 32% of SEO pricings are made in the three weeks prior to an earnings announcement. Given these statistics, we examine whether these corporate actions provide information about upcoming earnings announcements (earnings predictability) to the extent that new information has not been fully incorporated into prices by market participants.
We find evidence of earnings predictability: the market reaction to earnings following buyback announcements is higher by 5.1% than the reaction to earnings following equity issues over the (-1,+30) window when four-factor abnormal returns are used; the difference is 2.2% when unadjusted returns are considered. The results are robust to several alternate sample construction methodologies. There are at least two puzzling effects of earnings predictability that are difficult to reconcile with the market efficiency hypothesis. First, there is an incomplete adjustment to SEO pricings and buyback announcements that results in residual market reaction to earnings announcements. Second, prices continue to drift after earnings announcements: upward for buybacks and downward for SEO pricings. Unlike post-earnings announcement drift, the drift documented here does not depend on the market reaction to earnings announcement. We test several reasons for this anomalous behavior including prior returns, price, size of buyback or SEO, analyst forecast errors, and bid-ask spread. We find that information asymmetry proxies partially explain the persistence of earnings predictability following SEO pricings and buyback announcements.Ph. D.
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Nilsson, Mattias. "Essays in empirical corporate finance and governance." Doctoral thesis, Handelshögskolan i Stockholm, Finansiell Ekonomi (FI), 2002. http://urn.kb.se/resolve?urn=urn:nbn:se:hhs:diva-587.
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Agency Costs of Controlling Minority Shareholders (coauthored with Henrik Cronqvist) estimates the agency costs of controlling minority shareholders (CMSs) using a panel of Swedish listed firms. CMSs are owners who have a control stake of the firm’s votes while owning only a minority fraction of the firm’s equity. The study documents that families in control are almost exclusively CMSs through an extensive use of dual-class shares. The results show that increased ownership of votes by a controlling owner is associated with an economically and statistically significant decrease in firm value, but that the decrease in firm value is significantly larger for firms with family CMSs than for firms with financial institutions or corporations in control. This indicates that the agency costs of family CMSs are larger than the agency costs of other controlling owners.Family Ownership, Control Considerations, and Corporate Financing Decisions: An Empirical Analysis analyzes the relation between concentrated family control and firms’ choice of capital structure for a panel of Swedish listed firms. The results suggest that the capital structure choices made by firms with families in control are influenced by the controlling families’ desire to protect their control, and that the resulting capital structures are likely to increase the agency costs of family control. The Choice between Rights Offerings and Private Equity Placements (coauthored with Henrik Cronqvist) analyzes the determinants of the choice between rights offerings and private equity placements using a sample of rights offerings and private placements made by listed Swedish firms. The results indicate that control considerations explain why firms make uninsured rights offerings. The evidence also suggest that private placements, and to some extent underwritten rights offerings, are made by potentially undervalued firms in order to overcome underinvestment problems resulting from asymmetric information about firm value. Furthermore, private placements are frequently made in conjunction with the establishment of a product market relationship between purchaser and seller, which is consistent with equity ownership reducing contracting costs in new product market relationships. Why Agency Costs Explain Diversification Discounts (coauthored with Henrik Cronqvist and Peter Högfeldt) studies diversification within the real estate industry, in which firms can diversify over property types and geographical regions. Similar to previous studies, this essay documents the existence of a diversification discount. However, the major cause of the diversification discount is not diversification per se but anticipated costs due to rent dissipation in future diversifying acquisitions. Firms expected to pursue non-focusing strategies do indeed diversify more, are valued ex ante at a 20% discount over firms anticipated to follow a focusing strategy, and are predominantly family controlled. The ex ante diversification discount is, therefore, a measure of agency costs. The Difference in Acquirer Returns between Takeovers of Public Targets and Takeovers of Private Targets shows, for a sample of Swedish takeovers, that the average acquirer abnormal return is positive and significant when the target firm is privately held but insignificant when the target firm is listed on a stock exchange. These results are robust when controlling for sample selection problems and other variables capable of explaining acquirer returns. The evidence is consistent with greater acquirer bargaining power and resolution of information asymmetries in takeovers of private targets.Diss. Stockholm : Handelshögskolan, 2002
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Zhu, Yin. "Essays on accounting and incentives in Chinese equity markets." Thesis, University of Manchester, 2015. https://www.research.manchester.ac.uk/portal/en/theses/essays-on-accounting-and-incentives-in-chinese-equity-markets(74adb2ee-0cfc-40f6-8d62-392ab7bbdc1b).html.
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In this thesis, I exploit accounting issues in the Chinese context with a particular focus on the role of government. The thesis consists of three empirical essays, examining how the state coordinates among the state-owned enterprises in executive compensation (essay 1), how the government regulates the dividend payouts of listed firms (essay 2) and how the delisting regulation influences the accounting choices of listed firms (essay 3).The first essay examines relative performance evaluation (RPE) in China. Previous studies of RPE for executive compensations in Western developed markets have produced mixed findings. This is partly because the dispersion of share ownership in Western capital markets does not closely correspond with the single-principal/multi-agent theoretical setting assumed by Holmstrom (1982). In this study, I exploit the existence of a large number of state-owned enterprises (SOEs) in China to examine RPE in a setting closer to the theoretical assumption. I find that SOEs are more likely to use RPE for executive compensation than non-SOEs. This is consistent with better cross-firm coordination in executive contracting among SOEs under a common “state” principal than among non-SOEs with dispersed principals similar to Western firms. Furthermore, I find a more pronounced RPE effect among SOEs that are larger or have poorer past performance. This implies that the state principal has greater incentives to monitor strategically important firms or those in distress. The second essay examines the market reaction to and earnings management choices around changes in the regulations requiring a higher minimum dividend payout in China to shed new light on the determinants of dividend payout policy. I find that the market reaction is more positive for firms that paid less than the new required minimum payout than for those that paid more than the new required minimum, consistent with agency cost explanations of dividend payout. In addition, I find that low dividend payers exhibit a greater tendency to manage their earnings downwards to comply with the earnings-based threshold, and investors can “see through” such earnings management behaviors. My findings support the view of DeAngelo, DeAngelo and Skinner (2009) that agency costs of free cash flow retention are an important part of the dividend payout story. The third essay explores the earnings-based delisting rule in China that provides particularly strong motivation to manage earnings above the loss/profit threshold. I identify two groups of firms that successfully avoid being ST-ed, i.e. firms with a one-year loss before returning to profit, and firms with consecutive small profits. I provide a comprehensive examination of earnings management in terms of accruals management, real earnings management and non-operating income, to investigate whether Chinese firms manage earnings either to avoid reporting a loss or to avoid reporting two consecutive losses. Though there are mixed results sensitive to the research design for earnings management pattern in the two groups of firms, this study provides insights into earnings management induced by a government regulation.
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Puleo, Michael. "Insider Share-Pledging and Firm Investors." Diss., Temple University Libraries, 2016. http://cdm16002.contentdm.oclc.org/cdm/ref/collection/p245801coll10/id/386109.
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Business Administration/FinancePh.D.
Corporate insiders frequently borrow from lending institutions and pledge personal equity shares as collateral for the loan. Using manually collected pledge data for January 2007-December 2011, I examine how this phenomena affects firm investors and analyze agency conflicts between pledging managers and (a) outside shareholders, and (b) bondholders. Pledging potentially influences investor risk through changing managerial incentives and/or contingency risk from ill-timed margin calls. Findings suggest influential insiders extract private benefits of control at the expense of outside shareholders through pledging. Difference-in-differences regressions utilizing an exogenous shock to lending supply indicate pledging corresponds with a 9.9% relative increase in stock volatility – controlling for changes in fundamentals – and support a causal interpretation of the relation between pledging and equity risk. Despite apparently harming equity investors however, further analysis suggests pledging benefits bondholders, and corresponds with an economically and statistically significant reduction in yield spreads on corporate bonds. Robustness tests evidence reductions in risky financing when insiders pledge, corroborating the negative relation between pledging and cost of debt and consistent with mitigated agency conflicts between managers and bondholders.
Temple University--Theses
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Burkhardt, Kirsten. "Le rôle des sociétés de capital-investissement dans la formation d'alliances stratégiques." Thesis, Dijon, 2014. http://www.theses.fr/2014DIJOE009/document.
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Ce travail analyse le rôle des sociétés de capital-investissement dans la formation d’alliances stratégiques sur le marché français du capital-investissement. Après nous être fait une idée de l’importance du phénomène à l’aide des informations nouvelles que nous avons générées par notre propre enquête, nous apportons une explication au phénomène observé. L’analyse théorique se fait sous l’angle de la création de valeur actionnariale, en recourant conjointement aux théories contractuelles et cognitives. Les théories sociologiques des réseaux viennent compléter les principaux arguments de ces deux cadres théoriques. Le modèle explicatif qui en découle est ensuite mis à l’épreuve empirique à l’aide d’une étude multi-méthodes à visée infirmationniste, combinant une analyse économétrique et une étude de cas multiples. Nos résultats permettent de conclure que les sociétés françaises de capital-investissement jouent un rôle tant intentionnel que non intentionnel dans la formation d’alliances stratégiques pour leurs participations. Ces rôles mettent en avant une intervention tant passive qu’active des sociétés françaises de capital-investissement. Bien que l’argumentation cognitive trouve, dans son ensemble, plus de support que l’argumentation contractuelle, l’analyse fait ressortir l’intérêt de recourir à une utilisation conjointe des théories contractuelles et cognitives qui se révèlent complémentairesThis research analyses the role of Private Equity firms in the formation of strategic alliances within the field of the French Private Equity market. We start to provide evidence of its importance from new survey information, before offering an explanation of the organizational phenomenon. The study addresses the questions of how and why Private Equity firms act as relational intermediaries to help their portfolio companies form alliances. Both questions are investigated in the light of the Private Equity firms’ contribution to the value creation process that comes with alliance formation. Answers are provided by means of three jointly used theoretical frameworks: (1) mainstream theories (transaction cost theory and the positive theory of agency); (2) the knowledge based view; and 3) social network theories to complement the resulting from jointly use of the previous two theories. The theoretical construct is then tested empirically by means of a multi-method study with explanatory design, based on the pattern of joint evidence from both statistical tests and a multiple case study. Results show that French Private Equity firms do play a role in alliance formation. This role can be intentional as well as non-intentional. Furthermore, although arguments from the knowledge-based perspective finds more support in explaining this behavior than from the mainstream theories, our study highlights the benefits of the joint use of these theories and the complementary nature of them to better explaining the phenomenon as a whole
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HUANG, YU-CHEN, and 黃昱甄. "Overvalued Equity and Agency Costs." Thesis, 2006. http://ndltd.ncl.edu.tw/handle/01100880424095238787.
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碩士國立臺北大學
會計學系
94
The main purpose of this study is to explore the relationship between overvalued equity and agency costs. A series of papers by Jensen (2002; 2005) demonstrate that, when a firm’s equity is overvalued that it will not, except by pure luck, be able to deliver the financial performance the market requires justifying that valuation, managers are likely to take actions designed to meet the market’s optimistic expectations and sustain the overvaluation, instead of disseminating information disappoint capital markets. They are more likely to generate the appearance of improved performance in the short run. Such actions, however, may sacrifice equity value of the firms in the long run. Kothari, Loutskina, Nikolaev (2005) find that, there is a positive relation between leading period returns and year zero accruals for high accrual-decile firms, however the price reverses in subsequent year. In addition, investment-financing decisions and insider trading activity also correspond with the agency theory of overvalued equity. This study uses Earnings-Based Valuation Model to estimate the theoretical value of a firm’s equity with public available information and management foresight information. The difference between actual and theoretical value is misvaluation. By comparing with the misvaluations which happen in different situations, we test whether asymmetric information exists or not. Moreover, taking assets utilization rate, discretional expense rate and firm size as the proxies of agency costs to examine the connection between agency costs and misvaluation. Research data were collected from TSEC listed companies issued seasoned equity from 1994 to 2002, and the major findings are summarized as follows: 1.SEO companies are more likely to issue equity when stock price are overestimated. 2.Misevaluation based on management foresight information is more than misvaluation based on public available information, and the result shows that when the equity is overvalued, information asymmetries is more serious. 3.There is a significantly negative relation between assets utilization rate and misvaluation, as well as firm size and misevaluation. However, as we separate samples into over-group and under-group by positive or negative value of misevaluation, such significant relation only exists in over-group. This finding implied that the relation between agency costs and misvaluation may not be linear.
Books on the topic "Equity Agency Costs"
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DeAngelo, Harry. Dividend policy, agency costs, and earned equity. Cambridge, MA: National Bureau of Economic Research, 2004.
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Junker, Lukas. Equity Carveouts, Agency Costs, and Firm Value. Wiesbaden: Deutscher Universitätsverlag, 2005. http://dx.doi.org/10.1007/978-3-322-82117-1.
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Bebchuk, Lucian A. Stock pyramids, cross-ownership, and dual class equity: The creation and agency costs of separating control from cash flow rights. Cambridge, MA: National Bureau of Economic Research, 1999.
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Thompson, R. Steve. U.K.management buyouts deals: Debt, equity and agency cost implications. Nottingham: Centre for Management Buy-Out Research, 1990.
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Junker, Lukas. Equity Carveouts, Agency Costs, and Firm Value. DUV, 2006.
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Armour, John. Bank Governance. Edited by Jeffrey N. Gordon and Wolf-Georg Ringe. Oxford University Press, 2016. http://dx.doi.org/10.1093/oxfordhb/9780198743682.013.48.
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According to a common narrative, the failure of banks in the financial crisis reflected poor corporate governance practices, as well as inadequate prudential regulatory safeguards. Yet it turns out that the “best” governance practices according to ordinary standards were the ones that did worst during the financial crisis. In the period leading up to the financial crisis, it was believed that regulation would cause banks to internalize the costs of their activities, meaning that what maximized bank shareholders’ returns would also be in the interests of society. Consequently, large banks used the same governance tools as non-financial companies to minimize shareholder-management agency costs, namely independent boards, shareholder rights, the shareholder primacy norm, the threat of takeovers, and equity-based executive compensation. Unfortunately, such tools had the adverse effect of encouraging bank managers to take excessive risks. Consequently, a significant rethink about the way in which banks are governed is required.
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Gormley, Bill. James Q. Wilson,. Edited by Martin Lodge, Edward C. Page, and Steven J. Balla. Oxford University Press, 2016. http://dx.doi.org/10.1093/oxfordhb/9780199646135.013.2.
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This chapter examines James Q. Wilson’sBureaucracy: What Government Agencies Do and Why they Do it, and compares Wilson’s approach to that of neoclassical economics, paying particular attention to his denunciation of William Niskanen’s “bureaucratic imperialism” hypothesis and his rejection of “principal-agent” models which predict widespread “shirking” by bureaucrats. It discusses his argument that every bureaucracy has a distinctive culture that helps shape the behavior of individual bureaucrats. The chapter explores Wilson’s other views with regards to “capture theory,” accountability, and the ability of markets to promote efficiency and of governments to promote equity. Finally, it evaluates Wilson’s impact on other scholars, emphasizing: his bottom–up approach to studying bureaucracy, organizational culture, his typologies of policy proposals that differ in terms of benefits and costs, and of administrative agencies that differ in terms of outputs and outcomes.
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Unpaid Health Care Work: A Gender Equality Perspective. Pan American Health Organization, 2021. http://dx.doi.org/10.37774/9789275122310.
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A debate on public goods is urgently needed in health care. Care must be recognized as a social function, as an occupation and, at the same time, as a human right—which imposes binding obligations to comply with precise standards of quality, quantity, suitability, adaptability, and accessibility, among others. It is a complex and invisible task, that may be done as part of a medical treatment, post-surgical recovery process, or permanent support in cases of chronic illness, disability, or mental health conditions. And it tends to be provided mainly in the home, by women, without remuneration. In Latin America, care has not been included in a coordinated and specific public health policy agenda but has been advanced through isolated actions—in many cases highly fragmented and heterogeneous—without a clear awareness of the public nature of care and the associated responsibility of the State. Accordingly, this document takes a gender and rights-based approach. It starts with an analysis of the main definitions of unpaid work in the health sector, and then focuses on initiatives in three Latin American countries (Colombia, Costa Rica, and Uruguay) with regard to measurement, valuation, integration, and recognition in national health systems or policies, in care models, and in time-use surveys. The conclusions propose recommendations aimed at addressing unpaid care as an essential element of social policies in general, and health policies in particular, from a gender and rights-based perspective.
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Case, Jay R. Methodists and Holiness in North America. Oxford University Press, 2017. http://dx.doi.org/10.1093/oso/9780199683710.003.0009.
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Baptists in nineteenth-century North America were known as eager proselytizers. They were evangelistic, committed to the idea of a believers’ church in which believers’ baptism was the norm for church membership and for the most part fervent revivalists. Baptist numbers soared in the early nineteenth-century United States though at the cost of generating much internal dissent, while in Canada New Light preachers such as Henry Alline were influential, but often had to make headway against an Anglican establishment. The Baptist commitment to freedom of conscience and gathered congregations had been hardened over the centuries by the experience of persecution and that meant that they were loath to qualify the freedom of individual congregations. The chapter concentrates on exposing the numerous divisions in the Baptist family, the most basic of which was the disagreement over the nature of the atonement, which separated General (Arminian) from Particular (Calvinist) Baptists. Revivals induced further divisions between Regular Baptists who were reserved about them and Separate Baptists who saw dramatic conversions and fervent outbursts as external signs of inward grace. Calvinistic Baptists took a dim view of efforts to induce conversions as laying too much trust in human agency. Though enthusiasm for missions gripped American and Canadian Baptists alike, there were those who feared that missionary societies would erode congregational autonomy. Dissent over slavery and abolition constituted the biggest single division in North American Baptist life. Southern Baptists developed biblical defences of slavery and were annoyed at attempts to keep slaveholders out of missionary work. As a result they formed a separate denomination, the Southern Baptist Convention, in 1845. Baptists had been successful in converting black slaves and black Baptists such as the northerner Nathaniel Paul were outspoken abolitionists. In the South after the Civil War, though, blacks marched out of white denominations to form associations of their own, often with white encouragement. Finally, not the least cause of internal dissent were disputes over ecclesiology, with J.M. Graves and J.R. Pendleton, the founders of Old Landmarkism, insisting with renewed radicalism on denominational autonomy. The chapter suggests that by the end of the century, Baptists embodied the tensions in Dissenting traditions. Their dissent in the public square intensified the possibility of internal disagreement, even schism, their tradition of Christian democracy proving salvifically liberating but ecclesiastically messy. While they stood for liberty and religious equality, they were active in anti-Catholic politics and in seeking to extend state activism in society through the Social Gospel movement.
Book chapters on the topic "Equity Agency Costs"
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Junker, Lukas. "Introduction." In Equity Carveouts, Agency Costs, and Firm Value, 1–25. Wiesbaden: Deutscher Universitätsverlag, 2005. http://dx.doi.org/10.1007/978-3-322-82117-1_1.
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Junker, Lukas. "Theoretical Foundations." In Equity Carveouts, Agency Costs, and Firm Value, 27–64. Wiesbaden: Deutscher Universitätsverlag, 2005. http://dx.doi.org/10.1007/978-3-322-82117-1_2.
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Junker, Lukas. "Hypothesis development." In Equity Carveouts, Agency Costs, and Firm Value, 65–148. Wiesbaden: Deutscher Universitätsverlag, 2005. http://dx.doi.org/10.1007/978-3-322-82117-1_3.
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Junker, Lukas. "Empirical Evidence." In Equity Carveouts, Agency Costs, and Firm Value, 149–360. Wiesbaden: Deutscher Universitätsverlag, 2005. http://dx.doi.org/10.1007/978-3-322-82117-1_4.
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Junker, Lukas. "Conclusion." In Equity Carveouts, Agency Costs, and Firm Value, 361–65. Wiesbaden: Deutscher Universitätsverlag, 2005. http://dx.doi.org/10.1007/978-3-322-82117-1_5.
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Junker, Lukas. "References." In Equity Carveouts, Agency Costs, and Firm Value, 367–445. Wiesbaden: Deutscher Universitätsverlag, 2005. http://dx.doi.org/10.1007/978-3-322-82117-1_6.
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Owen, Geoffrey, Tom Kirchmaier, and Jeremy Grant. "Michael Jensen on Agency Costs of Overvalued Equity." In Corporate Governance in the US and Europe, 21–24. London: Palgrave Macmillan UK, 2006. http://dx.doi.org/10.1057/9780230512450_2.
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"Agency Cost Mitigation." In Corporate Governance and Responsible Investment in Private Equity, 47–72. Cambridge University Press, 2021. http://dx.doi.org/10.1017/9781108641838.004.
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Lupton, Nathaniel C., Guoliang Frank Jiang, and Luis F. Escobar. "National Income Inequality, Society, and Multinational Enterprises." In Geopolitics and Strategic Management in the Global Economy, 219–41. IGI Global, 2018. http://dx.doi.org/10.4018/978-1-5225-2673-5.ch011.
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This chapter calls for understanding the perspective of multinational enterprises (MNEs) on international differences in income inequality. The authors set a research agenda on how national differences in income inequality influence MNE expansion strategies. Applying a transaction cost framework, both negative and positive economic outcomes of income inequality, from the MNE's perspective, are identified. Low levels of income inequality may deter foreign investment, as MNEs prefer countries where they incur lower levels of transaction costs arising from interactions with various market and non-market actors. However, the positive effect of income inequality on location attractiveness will likely diminish at higher levels of inequality when benefits are increasingly offset by additional monitoring, bargaining and security costs owing to instability and conflict. The chapter further explores the implications for level of MNE equity applied in the choice of entry mode under different levels of income inequality.
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Jerabeck, Matthew John, Marc Perkins, and David Petruzzellis. "Microstructure of Fixed Income Trading." In Debt Markets and Investments, 639–58. Oxford University Press, 2019. http://dx.doi.org/10.1093/oso/9780190877439.003.0033.
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Some fixed income securities trade infrequently with high transaction costs. Although equity securities trade mostly on centralized exchanges or platforms, many bonds are inaccessible without an intermediary. Broker-dealers help create a channel between these otherwise illiquid and fractured markets, enabling the flow of information and capital between participants. These agents provide a critical service to developing markets, but they are increasingly threatened by modernization. Two forces are shifting the landscape of fixed income trading: (1) regulation is increasing the cost of business and (2) automation is squeezing profit margins. Although these changes may improve market efficiency in the long-term, they may come at the cost of short-term volatility and price shocks. This chapter describes the microstructure of fixed income trading, focusing on the mechanisms through which prices and liquidity are discovered in the Treasury, corporate, and municipal bond markets.
Conference papers on the topic "Equity Agency Costs"
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Hua, Zhang, Gao Yun-zhe, and Han Dong-ping. "Debt level and equity agency costs: Evidence from public listed companies in China." In 2010 International Conference on Management Science and Engineering (ICMSE). IEEE, 2010. http://dx.doi.org/10.1109/icmse.2010.5719966.
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Wan, Congying, and Jian Xu. "The Impact of Equity Structure Reform on the Relationship between Equity Structure and Equity Agency Cost: An Empirical Analysis of Retail Listed Companies." In 2009 International Conference on Management and Service Science (MASS). IEEE, 2009. http://dx.doi.org/10.1109/icmss.2009.5301172.
Full textReports on the topic "Equity Agency Costs"
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DeAngelo, Harry, Linda DeAngelo, and Rene Stulz. Dividend Policy, Agency Costs, and Earned Equity. Cambridge, MA: National Bureau of Economic Research, July 2004. http://dx.doi.org/10.3386/w10599.
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Bebchuk, Lucian, Reinier Kraakman, and George Triantis. Stock Pyramids, Cross-Ownership, and the Dual Class Equity: The Creation and Agency Costs of Seperating Control from Cash Flow Rights. Cambridge, MA: National Bureau of Economic Research, February 1999. http://dx.doi.org/10.3386/w6951.
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Murad, M. Hassan, Stephanie M. Chang, Celia Fiordalisi, Jennifer S. Lin, Timothy J. Wilt, Amy Tsou, Brian Leas, et al. Improving the Utility of Evidence Synthesis for Decision Makers in the Face of Insufficient Evidence. Agency for Healthcare Research and Quality (AHRQ), April 2021. http://dx.doi.org/10.23970/ahrqepcwhitepaperimproving.
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Background: Healthcare decision makers strive to operate on the best available evidence. The Agency for Healthcare Research and Quality Evidence-based Practice Center (EPC) Program aims to support healthcare decision makers by producing evidence reviews that rate the strength of evidence. However, the evidence base is often sparse or heterogeneous, or otherwise results in a high degree of uncertainty and insufficient evidence ratings. Objective: To identify and suggest strategies to make insufficient ratings in systematic reviews more actionable. Methods: A workgroup comprising EPC Program members convened throughout 2020. We conducted interative discussions considering information from three data sources: a literature review for relevant publications and frameworks, a review of a convenience sample of past systematic reviews conducted by the EPCs, and an audit of methods used in past EPC technical briefs. Results: Several themes emerged across the literature review, review of systematic reviews, and review of technical brief methods. In the purposive sample of 43 systematic reviews, the use of the term “insufficient” covered both instances of no evidence and instances of evidence being present but insufficient to estimate an effect. The results of the literature review and review of the EPC Program systematic reviews illustrated the importance of clearly stating the reasons for insufficient evidence. Results of both the literature review and review of systematic reviews highlighted the factors decision makers consider when making decisions when evidence of benefits or harms is insufficient, such as costs, values, preferences, and equity. We identified five strategies for supplementing systematic review findings when evidence on benefit or harms is expected to be or found to be insufficient, including: reconsidering eligible study designs, summarizing indirect evidence, summarizing contextual and implementation evidence, modelling, and incorporating unpublished health system data. Conclusion: Throughout early scoping, protocol development, review conduct, and review presentation, authors should consider five possible strategies to supplement potential insufficient findings of benefit or harms. When there is no evidence available for a specific outcome, reviewers should use a statement such as “no studies” instead of “insufficient.” The main reasons for insufficient evidence rating should be explicitly described.