Industry Competition, Agency Problem, and Firm Performance

Sue-Fung Wang, Yow-Jen Jou, Ke-Chiun Chang () and Kun-Wei Wu
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Sue-Fung Wang: School of Economics and Management, Wuhan University, Wuhan, China. Institution of Finance, National Chiao Tung University, Hsinchu, Taiwan.
Yow-Jen Jou: School of Economics and Management, Wuhan University, Wuhan, China. Institution of Finance, National Chiao Tung University, Hsinchu, Taiwan.
Ke-Chiun Chang: School of Economics and Management, Wuhan University, Wuhan, China.
Kun-Wei Wu: School of Economics and Management, Wuhan University, Wuhan, China. Institution of Finance, National Chiao Tung University, Hsinchu, Taiwan.

Journal for Economic Forecasting, 2014, issue 4, 76-93

Abstract: The study investigates the relationship between industry competition and firm performance in relation to agency problem conditions. At the same time, the literature also stated that different levels of national corporate governance have different impacts on corporate performance. We also investigate whether or not the relation between industry competition and firm performance would be different under different levels of agency problem. Our empirical results show that the positive relation between industry competition and firm performance is relatively significant for firms with higher free cash flows that present severe agency problems. The results do not change under different levels of national corporate governance.

Keywords: industry competition; agency problem; country-level governance (search for similar items in EconPapers)
JEL-codes: G3 L1 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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