The Effect of Check-and-balance Ownership Structure on Agency Problems: A Theoretical Model
Type I and type II agency problems more or less exist in modern corporations. The former arises from the conflicting interests between managers and shareholders, while the latter results from the inconsistent benefits between blockholders and minority ones. Does a check-and-balance ownership structure contribute to the solution of agency problems? In this paper, we find that the answer depends on the fraction of shares held by the largest shareholders because the multiple large shareholders have different effects on the two types of agency problems. When the share is lower, a check-and-balance ownership structure may exacerbate agency problems due to the coalition effect, and vice versa owing to the monitoring effect. Thus there will be a balance point where a check-and-balance ownership structure may have no significant influence on agency problems.
Agency Problems Check-and-Balance Ownership Structure Theoretical Model
Fan Ronghui Zhang Hongbing
School of Management Science and Engineering, Shanxi University of Finance and Economics, Taiyuan,P.R.China, 030006
国际会议
郑州
英文
2008-09-20（万方平台首次上网日期，不代表论文的发表时间）