Product Market Competition and Agency Costs
Author | : Jennifer Jane Baggs |
Publisher | : |
Total Pages | : 0 |
Release | : 2006 |
Genre | : |
ISBN | : |
Download Product Market Competition and Agency Costs Book in PDF, ePub and Kindle
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Product Market Competition And Agency Costs PDF full book. Access full book title Product Market Competition And Agency Costs.
Author | : Jennifer Jane Baggs |
Publisher | : |
Total Pages | : 0 |
Release | : 2006 |
Genre | : |
ISBN | : |
Author | : Ravi Jagannathan |
Publisher | : |
Total Pages | : 20 |
Release | : 2000 |
Genre | : Capital productivity |
ISBN | : |
The folk wisdom is that competition reduces agency costs. We provide indirect empirical support for this view. We argue that the temptation to retain cash and engage in less productive activities is more severe for firms in less competitive industries. Hence an unanticipated increase in cash-flow due to higher past returns is more likely to lead to a reduction in leverage as well as a lowering of future returns for firms in less competitive environments. Current leverage will therefore be negatively related to past returns and positively related to future returns for such firms. In contrast, for firms in more competitive industries, the negative relation between past returns and current leverage will be attenuated. Theory suggests that the relation between current leverage and future returns for such firms will be zero or negative. Using a proxy to distinguish firms in less competitive industries and data for 165 single business firms in the U.S.A., we provide empirical supports for our arguments
Author | : Rachel Griffith |
Publisher | : |
Total Pages | : |
Release | : 2001 |
Genre | : Commerce |
ISBN | : |
Author | : Harry DeAngelo |
Publisher | : Now Publishers Inc |
Total Pages | : 215 |
Release | : 2009 |
Genre | : Corporations |
ISBN | : 1601982046 |
Corporate Payout Policy synthesizes the academic research on payout policy and explains "how much, when, and how". That is (i) the overall value of payouts over the life of the enterprise, (ii) the time profile of a firm's payouts across periods, and (iii) the form of those payouts. The authors conclude that today's theory does a good job of explaining the general features of corporate payout policies, but some important gaps remain. So while our emphasis is to clarify "what we know" about payout policy, the authors also identify a number of interesting unresolved questions for future research. Corporate Payout Policy discusses potential influences on corporate payout policy including managerial use of payouts to signal future earnings to outside investors, individuals' behavioral biases that lead to sentiment-based demands for distributions, the desire of large block stockholders to maintain corporate control, and personal tax incentives to defer payouts. The authors highlight four important "carry-away" points: the literature's focus on whether repurchases will (or should) drive out dividends is misplaced because it implicitly assumes that a single payout vehicle is optimal; extant empirical evidence is strongly incompatible with the notion that the primary purpose of dividends is to signal managers' views of future earnings to outside investors; over-confidence on the part of managers is potentially a first-order determinant of payout policy because it induces them to over-retain resources to invest in dubious projects and so behavioral biases may, in fact, turn out to be more important than agency costs in explaining why investors pressure firms to accelerate payouts; the influence of controlling stockholders on payout policy --- particularly in non-U.S. firms, where controlling stockholders are common --- is a promising area for future research. Corporate Payout Policy is required reading for both researchers and practitioners interested in understanding this central topic in corporate finance and governance.
Author | : Adolf Augustus Berle |
Publisher | : |
Total Pages | : 396 |
Release | : 1937 |
Genre | : Corporation law |
ISBN | : |
Author | : Vidhi Chhaochharia |
Publisher | : |
Total Pages | : |
Release | : 2015 |
Genre | : |
ISBN | : |
We use the Sarbanes Oxley Act (SOX) as a natural experiment of a shock to internal governance to examine the link between product market competition and internal governance mechanisms. Consistent with the notion that product market competition is a close substitute for internal governance, we find that firms in concentrated industries experienced a larger improvement in operational efficiency after the approval of SOX than did firms in non-concentrated industries. These gains in efficiency appear to come from a significant reduction in production and administrative costs. Several robustness tests confirm that our main results are not driven by unobservable factors unrelated to changes in corporate governance.
Author | : Markus P. Urban |
Publisher | : Springer |
Total Pages | : 494 |
Release | : 2015-11-04 |
Genre | : Business & Economics |
ISBN | : 3658114029 |
Markus P. Urban investigates the influence of large shareholders (the so-called blockholders) on agency costs and firm value, thereby accounting for blockholder characteristics and blockholder interrelationships. The work provides a profound theoretical and empirical analysis on the nature and effect of shareholder engagement with due regard to the specifics of the German institutional environment. Its empirical results illustrate that the effect of shareholder engagement depends on the characteristics of the specific blockholder as well as on interrelationships with additional blockholders.
Author | : Wulung Li |
Publisher | : |
Total Pages | : 44 |
Release | : 2018 |
Genre | : |
ISBN | : |
Extant literature on cost stickiness has focused on how firm-specific characteristics affect the asymmetric cost behavior. In this paper, we explore how a firm's operating environment affects the firm's cost stickiness. Specifically, we examine the effect of product market competition on cost stickiness since a firm's investment and cost retention decisions partly depend on how the firm interacts with its rival firms in the product markets. Using two firm-level text-based product market competition measures extracted from management disclosures in firms' 10-K filings (Li, Lundholm, & Minnis 2013; Hoberg and Phillips 2010, 2015), we find strong evidence consistent with cost asymmetry increasing in competition after controlling for known economic determinants of cost stickiness. In additional analyses, we also find that the effect of product market competition on the degree of cost stickiness increases in firms' financial strength, likely because management in financially stronger firms has more resources for investment expenditures in spite of a sales fall. We also find that cost stickiness is increasing in competition if management is optimistic about future demand, whereas competition is not associated with cost asymmetry if management is pessimistic about future demand. Finally, we find that the relationship between competition and cost stickiness, although statistically insignificant at conventional levels, is more pronounced for single-segment firms relative to multi-segment firms.
Author | : Sabri Boubaker |
Publisher | : Springer Science & Business Media |
Total Pages | : 625 |
Release | : 2014-04-01 |
Genre | : Business & Economics |
ISBN | : 3642449557 |
This book fills the gap between theories and practices of corporate governance in emerging markets by providing the reader with an in-depth understanding of governance mechanisms, practices and cases in these markets. It is an invaluable resource not only for academic researchers and graduate students in law, economics, management and finance but also for people practicing governance such as lawmakers, policymakers and international organizations promoting best governance practices in emerging countries. Investors can benefit from this book to better understand of these markets and to make judicious investment decisions.
Author | : Philippe Aghion |
Publisher | : |
Total Pages | : 40 |
Release | : 1999 |
Genre | : Agency (Law) |
ISBN | : |