 A Replication of “Agency Problems of Excess Endowment Holdings in Not-for-profit Firms†(Journal of Accounting and Economics, 2006)Thad D. Calabrese and Anubhav Gupta Public Finance Review, 2019, vol. 47, issue 4, 747-774 Abstract: Core, Guay, and Verdi explore whether excessive levels of cash (“endowments†) are associated with nonprofits’ growth in program spending and fixed assets, agency problems, or donors’ monitoring efforts. We replicate their finding that excess endowments are unrelated to growth in program spending. However, unlike the original article, we find that persistent excess endowments are associated with growth in fixed assets. Further, when we alter the model specification to better align with theory, we find excess endowments increase program expense ratios and lead to higher growth in program service spending as well as capital investment. We are also able to replicate the original article’s finding that excess endowments are related to higher CEO and management compensation. However, when we again alter the model specification, we find excess endowments are associated with compensation declines. Overall, we find weaker evidence of a relationship between excess endowments and agency problems than the original article. Keywords: corporate governance; nonprofit organizations; cash holdings; endowment; agency problems (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:47:y:2019:i:4:p:747-774 Access Statistics for this article More articles in Public Finance Review |
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