Agency Conflicts Around the World

Erwan Morellec, Boris Nikolov and Norman Schürhoff
Additional contact information
Erwan Morellec: EPFL and Swiss Finance Institute
Boris Nikolov: EPFL, University of Lausanne and Swiss Finance Institute
Norman Schürhoff: EPFL, University of Lausanne and Swiss Finance Institute
Authors registered in the RePEc Author Service: Norman Schuerhoff

No 15-21, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We use a dynamic model of financing decisions to quantify agency conflicts across legal and institutional environments and decompose their effects into wealth transfers among stakeholders and value losses from policy distortions. Our estimates show that agency costs are large and vary widely across and within countries. Legal origin and provisions for investor protection affect agency costs, but they are more relevant for curtailing governance excesses than guarding the typical firm. Agency costs split about equally into wealth transfers and value losses from policy distortions, the latter being larger where ownership is dispersed. Incentive misalignment captures 60% of country variation in leverage.

Keywords: Capital structure; agency conflicts; corporate governance; structural estimation (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2015-07, Revised 2016-04
New Economics Papers: this item is included in nep-cfn
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Citations: View citations in EconPapers (1)

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http://ssrn.com/abstract=2630018 (application/pdf)

Related works:
Journal Article: Agency Conflicts around the World (2018)
Working Paper: Agency Conflicts Around the World (2016)
Working Paper: Agency Conflicts Around the World (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp1521

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