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THE ROLE OF AGENCY COSTS IN EXPLAINING FINANCIAL PERFORMANCE DIFFERENCES: AN EMPIRICAL ANALYSIS ON SELECTED PUBLIC FIRMS IN BRIC COUNTRIES

Year 2016, Volume: 12 Issue: 45, 187 - 210, 13.02.2016

Abstract

The consequences of the recent corporate scandals have directed the attention of corporations towards the opportunistic behaviors of managers; thus, evaluation of agency costs encountered within the firm. The divergence of interest between the managers and shareholders has a potential to con- stitute a threat to the firms’ financial performance. Due to the rising importance of the topic for both academic literature and practical grounds, this study attempts to evaluate the link between agency costs of equity and financial performance of selected public firms operating in BRIC countries be- tween the years 2003 and 2014, inclusive. Three measures have been utilized to proxy for agency costs of equity; namely, asset utilization ratio, operating expense ratio, and the ratio of free cash flows to total assets. An additional interaction variable is also generated to take into account the existence of investment opportunities when free cash flows are abundant. The findings based on panel data analysis are considered to provide useful insight upon an additional explanation to the presence of financial performance differences among the firms other than simply firm-specific attributes and emphasize the importance of finding mechanisms for alleviating agency costs to attain the overall goal of share- holder wealth maximization.

References

  • Berle, A. A. & Means, G. C. (1991). The Modern Corporation & Private Property; with A New Introduction by Murray Weidenbaum & Mark Jensen”, New Brunswick, N.J., U.S.A. : Transaction Publishers. (Originally published in 1932).
  • Ross, S. A. (1973). The Economic Theory of Agency: The Principle’s Problem, American Economic Review,63 (2), 134-139.
  • Jensen, M. C. & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economic, 3, (4), 305-360.
  • Morck, R., & Vishny, R. W. (1988). Management Ownership and Market Valuation: An Empirical Analysis, Journal of Financial Economics, 20, 293-315.
  • Henry, D. (2006). Agency Costs, Corporate Governance and Ownership Structure: Evi- dence from Australia, Working Paper Series.
  • Chen, X. C. & Yur- Austin, J. (2007). Re-measuring Agency Costs: The Effectiveness of Blockholders, The Quarterly Review of Economics and Finance, 47, 588-601.
  • Ertugrul, M. 2005. Essays on Agency Problems and Corporate Governance, PhD Thesis. The University of Connecticut, USA.
  • Florackis, C. (2008). Agency Costs and Corporate Governance Mechanisms: Evidence for UK Firms, International Journal of Managerial Finance, 4, (1), 37-59.
  • Piper, L. (2015). The BRICS Phenomenon: from Regional Economic Leaders to Global Po- litical Players, Working Paper, Published by: BRICS Initiative for Critical Agrarian Studies (BICAS).
  • Ang, J. S., Cole, R. A., & Lin, J. W. ( 2000). Agency Costs and Ownership Structure, The Journal of Finance,55, (1), 81–106.
  • Singh, M., Davidson III, W. N. (2003), Agency Costs, Ownership Structure and Corporate Governance Mechanisms, Journal of Banking & Finance, 27, 793-816.
  • Cole, R. A. & Mehran, H. (1998). The Effect of Changes in Ownership Structure on Perfor- mance: Evidence from the Thrift Industry, Journal of Financial Economics, 50,(3), 291-317.
  • Wang, G. Y. (2010). The Impacts of Free Cash Flows and Agency Costs on Firm Perfor- mance, Journal of Service Science and Management, 3, 408-418.
  • Stigler, G. J., (1976). The Existence of X-Efficiency, The American Economic Review, 66 (1), 213-216.
  • Berger, A. N., & Patti, E. B. (2006). Capital Structure and Firm Performance: A New Ap- proach to Testing Agency Theory and an Application to the Banking Industry, Journal of Banking & Finance, 30, 1065–1102.
  • Vogt, S. C., & Vu, J. D. (2000). Free Cash Flow and Long-Run Firm Value: Evidence from the Value Line Investment Survey, Journal of Managerial, XII, (2), 188-207.
  • Chang, S. C., Chen, S. S., Hsing, A., & Huang, C. W. (2007). Investment Opportunities, Free Cash Flow, and Valuation Effects of Secured Debt Offerings, Review of Quantitative Finance and Accounting, 28, 123-145.
  • Heydari, I., Mirzaeifar, M., & Javadghayedi, M. (2014). Investigating the Relationship be- tween Free Cash Flows and Firm Performance: Evidence from Tehran Stock Exchange, Indian Journal of Scientific Research, 4, (6), 269-279.
  • Pouraghajan, A., Tabari, N. A. Y., Mansourinia, E., & Emamgholipour, M., (2013). The Effect of Free Cash Flows and Agency Costs on Performance of Listed Companies in Tehran Stock Exchange, World of Sciences Journal, 1 (6), 1-10.
  • Mojtahedzadeh, V., and Nahavandi, N. N. A. P., (2011). FCF Agency Cost, Earnings Man- agement, and Investor Monitoring. Available at: http://dx.doi.org/10.2139/ssrn.1883103
  • Kim, B. And Lee, I. (2003). Agency Problems and Performance of Korean Companies during the Asian Financial Crisis: Chaebol vs. Non-chaebol Firms, Pacific-Basin Finance Journal,, 11, 327–348.
  • Truong, T. T. (2007). Corporate Ownership, Equity Agency Costs and Dividend Policy: An Empirical Analysis, Ph. D. Thesis, School of Economics, Finance and Marketing, RMIT University.
  • Jensen. M. C. (1986). Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers, The American Economic Review, 76, (2) , 323-329.
  • Gerpott, T. J., & Jakopin, N. M. (2005). International Marketing Standardization and Finan- cial Performance of Mobile Network Operators – An Empirical Analysis, Schmalenbach Business review, 57, 198-228.
  • Oeyono, J., Samy, M., & Bampton, R. (2011). An Examination of Corporate Social Respon- sibility and Financial Performance, Journal of Global Responsibility, 2 (1), 100-112.
  • Chi, J. D., & Gupta, M. (2009). Overvaluation and Earnings Management, Journal of Bank- ing & Finance, 33, 1652-1663.
  • Uğurlu, M. & Aksoy, H. (2006). Prediction of Corporate Financial Distress in an Emerging Market: The Case of Turkey, Cross Cultural Management: An International Journal, 13, (4), 277-295.
  • Konstantares, K. & Siriopoulos, C. (2011). Estimating Financial Distress with a Dynamic Model: Evidence from Family Owned Enterprises in a Small Open Economy, Journal of Multinational Financial Management, 21, 239-255.
  • Pukthuanthong, K. & Du, H. (2012). Does Family Ownership Create or Destroy Value? Evidence from Canada, International Journal of Managerial Finance, 9 (1), 13-48.
  • Shleifer, A., & Vishny, R. (1986). Large Shareholders and Corporate Control, Journal of Political Economy, 94, 461-488
  • Zhang, H.& Li, S. (2008). The Impact of Capital Structure on Agency Costs: Evidence from UK Public Companies, South Australia Center Research Papers, 1-18.
  • Güvençer, Ü.C. (2008). Vekalet Teorisi: Firma Performansına Etkisi, Master Thesis. Uludag University Institute of Social Sciences.
  • Wellalage, N. H., & Locke, S. (2011). Agency Costs, Ownership Structure and Corporate Governance Mechanisms: A Case Study in New Zealand Unlisted Small Companies, Jour- nal of Business Systems, Governance and Ethics, 6, (3), 53-71.
  • Rashid, A. (2013). CEO Duality and Agency Cost: Evidence from Bangladesh, Journal of Management & Governance, 17, 989-1008.
  • Park, K., & Jang, S. S. (2013). Capital Structure, Free Cash Flow, Diversification and Firm Performance: A Holistic Analysis, International Journal of Hospitality Management, 33, 51-63.
  • Doukas, J. A., Kim, C., & Pantzalis, C. (2000). Security Analysis, Agency Costs, and Com- pany Characteristics, Financial Analysts Journal, 56, 54–63.
  • Doukas, J. A., McKnight, P. J., & Pantzalis, C. (2005). Security Analysis, Agency Costs, and UK Firm Characteristics, International Review of Financial Analysis, 14, 493-507.
  • McKnight, P. J.,& Weir, C. (2009). Agency Costs, Corporate Governance Mechanisms and Ownership Structure in Large UK Publicly Quoted Companies: A Panel Data Analysis, The Quarterly Review of Economics and Finance, 49, 139-158
  • Fleming, G., Heaney, R., &, McCosker, R. (2005). Agency Costs and Ownership Structure in Australia, Pacific-Basin Finance Journal, 13, 29-52.
  • Brooks, R. & Davidson, S. (2003). R&D, Agency Costs and Capital Structure: International Evidence, Working Paper Series,1-47.
  • Florackis, C. & Ozkan, A. (2004). Agency Costs and Corporate Governance Mechanisms: Evidence for UK Firms, University of York, UK. Working Paper Series.
  • Davidson III, W.N., Bouresli, A.K. & Singh, M. (2006). Agency Costs, Ownership Structure, and Corporate Governance in Pre-and post-IPO Firms, Corporate Ownership and Control, 3,(3), 88-95.
  • Miller, S. E., (2009). Governance Mechanisms as Moderators of Agency Costs in A Pre-SOX Environment, Journal of Business & Economics Research, 7 (10), 15-32.
  • Jelinek, K. & Stuerke, P. S. (2009). The Nonlinear Relation between Agency Costs and Managerial Equity Ownership: Evidence of Decreasing Benefits of Increasing Ownership, International Journal of Managerial Finance, 5, (2), 156-178.
  • Junwei, W., Guiqin, L. and Ping, H. (2011). Study on the Relationship between Agency Costs and Governance Mechanisms: Evidence from China’s A-share Listed Companies, M&D Forum Studies, 258-271.
  • Gul, S., Sajid, M., Razzaq, N., & Afzal, F. (2012). Agency Cost, Corporate Governance and Ownership Structure (The Case of Pakistan), International Journal of Business and Social Science, 3, (9), 268-277.
  • Jung, H. (2008). WACC as the Touchstone Performance Indicator: The Use of Financial Ratios as Performance Indicator – from Operations to Capital Investments, International Journal of Contemporary Hospitality Management,20, (6), 700-710
  • Majumdar, S K. & D. K. Data (2008). Foreign Ownership and Firm Scope in India. European Journal of Law and Economics, 27 (1), 39-52.
  • Williamson, O. E. (1967). Hierarchical Control and Optimum Firm Size. The Journal of Political Economy, 75, (2), 123-138.
  • Boardman, A. E., Shapiro, D. M., & Vining, A. R. (1997). The Role of Agency Costs in Ex- plaining the Superior Performance of Foreign MNE Subsidiaries, International Business Review,6, (3), 295-317.
  • Chrisman, J. J., Chua, J. H., & Litz, R. A. (2004). Comparing the Agency Costs of Family and Non-Family Firms: Conceptual Issues and Exploratory Evidence, Entrepreneurship Theory and Practice, 28, 335-354.
  • Songini, L. & Gnan, L. (2015). Family Involvement and Agency Cost Control Mechanisms in Family Small and Medium-Sized Enterprises, Journal of Small Business Management, 53 (3), 748–779.
  • Grossman, S. J. & Hart, O. D. (1982). Corporate Financial Structure and Managerial Incen- tives, The Economics of Information and Uncertainty, edited by John McCall. Chicago: University of Chicago Press, 107-140.
  • Vithessonthi, C. & Tongurai, J. (2015). The Effect of Firm Size on the Leverage–Perfor- mance Relationship during the Financial Crisis of 2007 -2009, Journal of Multinational Financial Management, 29, 1-29.
  • Vaidean, V. L. (2014). On Financial Performance and Capital Structure of Romanian Com- panies, Finance – Challenges of the Future, 1, (16), 151-157.
  • Kordestani, A. A., Bengtsson, L., Farhat, F.,& Peighambari, K. (2010). Supply Chain Process Maturity and Financial Performance Study of Swedish Steel SME’s, Proceedings of the 17th Euroma Conference, 6-9 June, Porto, Portugal.
  • Arellano, M. (2003). Panel Data Econometrics. New York: Oxford University Press.
  • Breusch, T. S.& Pagan, A. R. (1979). A Simple Test for Heteroscedasticity and Random Coefficient Variation. Econometrica, 47, 1287-1294.
  • Gujarati D. N., (2004). Basic Econometrics. 4th Edition. New York: McGraw-Hill Companies.
  • Baltagi, B. H. (2001). Econometric Analysis of Panel Data. 2nd Edition. UK: John Wiley&Sons, Ltd.
  • Gujarati, D. M., Porter, D. C. (2009). Basic Econometrics. 5th Edition. New York: McGraw- Hill Companies.
  • Chhibber, P. K. & S. K. Majumdar. (1999). Foreign Ownership and Profitability: Property Rights, Control, and the Performance of Firms in Indian Industry. Journal of Law and Economics. 42.1, 209-238.
  • Majumdar, S K. & D. K. Data (2008). Foreign Ownership and Firm Scope in India. European Journal of Law and Economics, 27 (1), 39-52.
  • Barbosa, N. & H. Louri. (2005). Corporate Performance: Does Ownership Matter? A Com- parison of Foreign-and-Domestic-Owned Firms in Greece and Portugal. Review of Indus- trial Organization. 27, 73-112.
  • Perrini, F; G. Rossi & Barbara Rvetta (2008). Does Ownership Structure Affect Perfor- mance? Evidence from The Italian Market. Corporate Governance, 16 (4), 312-325.
  • Kapopoulos, P. and S. Lazaretou. (2007). Corporate Ownership Structure and Firm Perfor- mance: Evidence from Greek Firm. Corporate Governance. 15,(2), 144-158.
  • Aybars, A. (2015). The Influence of Selected Tools of Corporate Governance on Agency Costs: Empirical Evidence from Borsa Istanbul (BIST), International Research Journal of Finance and Economics,130,18-34.
  • Ali Osman GÜRBÜZ - ogurbuz@ticaret.edu.tr
  • He is the Dean of the Faculty of Commercial Sciences in Istanbul Commerce University. He has
  • been entitled to be a Professor since 2004. He conducts research in numerous topics specifically in
  • the area of corporate finance.
  • Asl ı AYBARS - asli.aybars@marmara.edu.tr
  • She is a Ph. D. at Marmara University, Faculty of Business Administration. She accomplished her Ph.
  • D. degree in Accounting and Finance at Marmara University Institute of Social Sciences in 2013. She
  • pursues her research in the area of corporate finance.
  • Serkan YEŞİLYURT- serkan.yesilyurt@eas.bahcesehir.edu.tr

VEKÂLET MALİYETLERİNİN FİNANSAL PERFORMANS FARKLILIKLARINI AÇIKLAMADAKİ ROLÜ: BRIC ÜLKELERİNDE FAALİYET GÖSTEREN SEÇİLMİŞ HALKA AÇIK FİRMALAR ÜZERİNE AMPİRİK BİR ÇALIŞMA

Year 2016, Volume: 12 Issue: 45, 187 - 210, 13.02.2016

Abstract

Son zamanlarda yaşanan şirket skandallarının sonuçları firmaların dikkatini yöneticilerin fırsatçı davranışlarına ve dolayısıyla firmalarda karşılaşılan vekalet maliyetlerinin değerlendirilmesine yönelt- miştir. Yöneticiler ve hissedarlar arasındaki çıkar çatışmaları firmaların finansal performanslarına yönelik bir tehdit unsuru oluşturmaktadır. İlgili konunun akademik literatür ve uygulama alanındaki artan önemi sebebiyle, bu çalışma öz sermayeye ilişkin vekalet maliyetleri ve finansal performans arasındaki ilişkiyi BRIC ülkelerinde faaliyet gösteren seçilmiş halka açık firmalar üzerinde 2003 ve 2014 yılları arasında değerlendirmeyi amaçlamaktadır. Öz sermayeye ilişkin vekalet maliyetlerini ölçmek için üç farklı değişken kullanılmıştır. Bunlar; varlık kullanım oranı, faaliyet giderleri oranı ve serbet nakim akımların toplam varlıklara oranı olarak belirlenmiştir. Ayrıca, nakit akımlarının bol olduğu durumda yatırım fırsatlarının varlığını göz önünde bulundurmak için de ek bir etkileşim değişkeni oluşturulmuştur. Panel veri analize dayandırılmış bulgular firmalar arasındaki finansal performans farklılıklarına ek bir açıklama getirmiş ve bunların sadece firmaya özgü niteliklerden kaynaklanmadığını vurgulamıştır. Ayrıca, bu çalışma hissedar- ların varlıklarını maksimize etme amacına ulaşmak için firmaların vekalet maliyetlerini düşürmek adına çeşitli makenizmalar geliştirmenin önemini vurgulamaktadır. 

References

  • Berle, A. A. & Means, G. C. (1991). The Modern Corporation & Private Property; with A New Introduction by Murray Weidenbaum & Mark Jensen”, New Brunswick, N.J., U.S.A. : Transaction Publishers. (Originally published in 1932).
  • Ross, S. A. (1973). The Economic Theory of Agency: The Principle’s Problem, American Economic Review,63 (2), 134-139.
  • Jensen, M. C. & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economic, 3, (4), 305-360.
  • Morck, R., & Vishny, R. W. (1988). Management Ownership and Market Valuation: An Empirical Analysis, Journal of Financial Economics, 20, 293-315.
  • Henry, D. (2006). Agency Costs, Corporate Governance and Ownership Structure: Evi- dence from Australia, Working Paper Series.
  • Chen, X. C. & Yur- Austin, J. (2007). Re-measuring Agency Costs: The Effectiveness of Blockholders, The Quarterly Review of Economics and Finance, 47, 588-601.
  • Ertugrul, M. 2005. Essays on Agency Problems and Corporate Governance, PhD Thesis. The University of Connecticut, USA.
  • Florackis, C. (2008). Agency Costs and Corporate Governance Mechanisms: Evidence for UK Firms, International Journal of Managerial Finance, 4, (1), 37-59.
  • Piper, L. (2015). The BRICS Phenomenon: from Regional Economic Leaders to Global Po- litical Players, Working Paper, Published by: BRICS Initiative for Critical Agrarian Studies (BICAS).
  • Ang, J. S., Cole, R. A., & Lin, J. W. ( 2000). Agency Costs and Ownership Structure, The Journal of Finance,55, (1), 81–106.
  • Singh, M., Davidson III, W. N. (2003), Agency Costs, Ownership Structure and Corporate Governance Mechanisms, Journal of Banking & Finance, 27, 793-816.
  • Cole, R. A. & Mehran, H. (1998). The Effect of Changes in Ownership Structure on Perfor- mance: Evidence from the Thrift Industry, Journal of Financial Economics, 50,(3), 291-317.
  • Wang, G. Y. (2010). The Impacts of Free Cash Flows and Agency Costs on Firm Perfor- mance, Journal of Service Science and Management, 3, 408-418.
  • Stigler, G. J., (1976). The Existence of X-Efficiency, The American Economic Review, 66 (1), 213-216.
  • Berger, A. N., & Patti, E. B. (2006). Capital Structure and Firm Performance: A New Ap- proach to Testing Agency Theory and an Application to the Banking Industry, Journal of Banking & Finance, 30, 1065–1102.
  • Vogt, S. C., & Vu, J. D. (2000). Free Cash Flow and Long-Run Firm Value: Evidence from the Value Line Investment Survey, Journal of Managerial, XII, (2), 188-207.
  • Chang, S. C., Chen, S. S., Hsing, A., & Huang, C. W. (2007). Investment Opportunities, Free Cash Flow, and Valuation Effects of Secured Debt Offerings, Review of Quantitative Finance and Accounting, 28, 123-145.
  • Heydari, I., Mirzaeifar, M., & Javadghayedi, M. (2014). Investigating the Relationship be- tween Free Cash Flows and Firm Performance: Evidence from Tehran Stock Exchange, Indian Journal of Scientific Research, 4, (6), 269-279.
  • Pouraghajan, A., Tabari, N. A. Y., Mansourinia, E., & Emamgholipour, M., (2013). The Effect of Free Cash Flows and Agency Costs on Performance of Listed Companies in Tehran Stock Exchange, World of Sciences Journal, 1 (6), 1-10.
  • Mojtahedzadeh, V., and Nahavandi, N. N. A. P., (2011). FCF Agency Cost, Earnings Man- agement, and Investor Monitoring. Available at: http://dx.doi.org/10.2139/ssrn.1883103
  • Kim, B. And Lee, I. (2003). Agency Problems and Performance of Korean Companies during the Asian Financial Crisis: Chaebol vs. Non-chaebol Firms, Pacific-Basin Finance Journal,, 11, 327–348.
  • Truong, T. T. (2007). Corporate Ownership, Equity Agency Costs and Dividend Policy: An Empirical Analysis, Ph. D. Thesis, School of Economics, Finance and Marketing, RMIT University.
  • Jensen. M. C. (1986). Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers, The American Economic Review, 76, (2) , 323-329.
  • Gerpott, T. J., & Jakopin, N. M. (2005). International Marketing Standardization and Finan- cial Performance of Mobile Network Operators – An Empirical Analysis, Schmalenbach Business review, 57, 198-228.
  • Oeyono, J., Samy, M., & Bampton, R. (2011). An Examination of Corporate Social Respon- sibility and Financial Performance, Journal of Global Responsibility, 2 (1), 100-112.
  • Chi, J. D., & Gupta, M. (2009). Overvaluation and Earnings Management, Journal of Bank- ing & Finance, 33, 1652-1663.
  • Uğurlu, M. & Aksoy, H. (2006). Prediction of Corporate Financial Distress in an Emerging Market: The Case of Turkey, Cross Cultural Management: An International Journal, 13, (4), 277-295.
  • Konstantares, K. & Siriopoulos, C. (2011). Estimating Financial Distress with a Dynamic Model: Evidence from Family Owned Enterprises in a Small Open Economy, Journal of Multinational Financial Management, 21, 239-255.
  • Pukthuanthong, K. & Du, H. (2012). Does Family Ownership Create or Destroy Value? Evidence from Canada, International Journal of Managerial Finance, 9 (1), 13-48.
  • Shleifer, A., & Vishny, R. (1986). Large Shareholders and Corporate Control, Journal of Political Economy, 94, 461-488
  • Zhang, H.& Li, S. (2008). The Impact of Capital Structure on Agency Costs: Evidence from UK Public Companies, South Australia Center Research Papers, 1-18.
  • Güvençer, Ü.C. (2008). Vekalet Teorisi: Firma Performansına Etkisi, Master Thesis. Uludag University Institute of Social Sciences.
  • Wellalage, N. H., & Locke, S. (2011). Agency Costs, Ownership Structure and Corporate Governance Mechanisms: A Case Study in New Zealand Unlisted Small Companies, Jour- nal of Business Systems, Governance and Ethics, 6, (3), 53-71.
  • Rashid, A. (2013). CEO Duality and Agency Cost: Evidence from Bangladesh, Journal of Management & Governance, 17, 989-1008.
  • Park, K., & Jang, S. S. (2013). Capital Structure, Free Cash Flow, Diversification and Firm Performance: A Holistic Analysis, International Journal of Hospitality Management, 33, 51-63.
  • Doukas, J. A., Kim, C., & Pantzalis, C. (2000). Security Analysis, Agency Costs, and Com- pany Characteristics, Financial Analysts Journal, 56, 54–63.
  • Doukas, J. A., McKnight, P. J., & Pantzalis, C. (2005). Security Analysis, Agency Costs, and UK Firm Characteristics, International Review of Financial Analysis, 14, 493-507.
  • McKnight, P. J.,& Weir, C. (2009). Agency Costs, Corporate Governance Mechanisms and Ownership Structure in Large UK Publicly Quoted Companies: A Panel Data Analysis, The Quarterly Review of Economics and Finance, 49, 139-158
  • Fleming, G., Heaney, R., &, McCosker, R. (2005). Agency Costs and Ownership Structure in Australia, Pacific-Basin Finance Journal, 13, 29-52.
  • Brooks, R. & Davidson, S. (2003). R&D, Agency Costs and Capital Structure: International Evidence, Working Paper Series,1-47.
  • Florackis, C. & Ozkan, A. (2004). Agency Costs and Corporate Governance Mechanisms: Evidence for UK Firms, University of York, UK. Working Paper Series.
  • Davidson III, W.N., Bouresli, A.K. & Singh, M. (2006). Agency Costs, Ownership Structure, and Corporate Governance in Pre-and post-IPO Firms, Corporate Ownership and Control, 3,(3), 88-95.
  • Miller, S. E., (2009). Governance Mechanisms as Moderators of Agency Costs in A Pre-SOX Environment, Journal of Business & Economics Research, 7 (10), 15-32.
  • Jelinek, K. & Stuerke, P. S. (2009). The Nonlinear Relation between Agency Costs and Managerial Equity Ownership: Evidence of Decreasing Benefits of Increasing Ownership, International Journal of Managerial Finance, 5, (2), 156-178.
  • Junwei, W., Guiqin, L. and Ping, H. (2011). Study on the Relationship between Agency Costs and Governance Mechanisms: Evidence from China’s A-share Listed Companies, M&D Forum Studies, 258-271.
  • Gul, S., Sajid, M., Razzaq, N., & Afzal, F. (2012). Agency Cost, Corporate Governance and Ownership Structure (The Case of Pakistan), International Journal of Business and Social Science, 3, (9), 268-277.
  • Jung, H. (2008). WACC as the Touchstone Performance Indicator: The Use of Financial Ratios as Performance Indicator – from Operations to Capital Investments, International Journal of Contemporary Hospitality Management,20, (6), 700-710
  • Majumdar, S K. & D. K. Data (2008). Foreign Ownership and Firm Scope in India. European Journal of Law and Economics, 27 (1), 39-52.
  • Williamson, O. E. (1967). Hierarchical Control and Optimum Firm Size. The Journal of Political Economy, 75, (2), 123-138.
  • Boardman, A. E., Shapiro, D. M., & Vining, A. R. (1997). The Role of Agency Costs in Ex- plaining the Superior Performance of Foreign MNE Subsidiaries, International Business Review,6, (3), 295-317.
  • Chrisman, J. J., Chua, J. H., & Litz, R. A. (2004). Comparing the Agency Costs of Family and Non-Family Firms: Conceptual Issues and Exploratory Evidence, Entrepreneurship Theory and Practice, 28, 335-354.
  • Songini, L. & Gnan, L. (2015). Family Involvement and Agency Cost Control Mechanisms in Family Small and Medium-Sized Enterprises, Journal of Small Business Management, 53 (3), 748–779.
  • Grossman, S. J. & Hart, O. D. (1982). Corporate Financial Structure and Managerial Incen- tives, The Economics of Information and Uncertainty, edited by John McCall. Chicago: University of Chicago Press, 107-140.
  • Vithessonthi, C. & Tongurai, J. (2015). The Effect of Firm Size on the Leverage–Perfor- mance Relationship during the Financial Crisis of 2007 -2009, Journal of Multinational Financial Management, 29, 1-29.
  • Vaidean, V. L. (2014). On Financial Performance and Capital Structure of Romanian Com- panies, Finance – Challenges of the Future, 1, (16), 151-157.
  • Kordestani, A. A., Bengtsson, L., Farhat, F.,& Peighambari, K. (2010). Supply Chain Process Maturity and Financial Performance Study of Swedish Steel SME’s, Proceedings of the 17th Euroma Conference, 6-9 June, Porto, Portugal.
  • Arellano, M. (2003). Panel Data Econometrics. New York: Oxford University Press.
  • Breusch, T. S.& Pagan, A. R. (1979). A Simple Test for Heteroscedasticity and Random Coefficient Variation. Econometrica, 47, 1287-1294.
  • Gujarati D. N., (2004). Basic Econometrics. 4th Edition. New York: McGraw-Hill Companies.
  • Baltagi, B. H. (2001). Econometric Analysis of Panel Data. 2nd Edition. UK: John Wiley&Sons, Ltd.
  • Gujarati, D. M., Porter, D. C. (2009). Basic Econometrics. 5th Edition. New York: McGraw- Hill Companies.
  • Chhibber, P. K. & S. K. Majumdar. (1999). Foreign Ownership and Profitability: Property Rights, Control, and the Performance of Firms in Indian Industry. Journal of Law and Economics. 42.1, 209-238.
  • Majumdar, S K. & D. K. Data (2008). Foreign Ownership and Firm Scope in India. European Journal of Law and Economics, 27 (1), 39-52.
  • Barbosa, N. & H. Louri. (2005). Corporate Performance: Does Ownership Matter? A Com- parison of Foreign-and-Domestic-Owned Firms in Greece and Portugal. Review of Indus- trial Organization. 27, 73-112.
  • Perrini, F; G. Rossi & Barbara Rvetta (2008). Does Ownership Structure Affect Perfor- mance? Evidence from The Italian Market. Corporate Governance, 16 (4), 312-325.
  • Kapopoulos, P. and S. Lazaretou. (2007). Corporate Ownership Structure and Firm Perfor- mance: Evidence from Greek Firm. Corporate Governance. 15,(2), 144-158.
  • Aybars, A. (2015). The Influence of Selected Tools of Corporate Governance on Agency Costs: Empirical Evidence from Borsa Istanbul (BIST), International Research Journal of Finance and Economics,130,18-34.
  • Ali Osman GÜRBÜZ - ogurbuz@ticaret.edu.tr
  • He is the Dean of the Faculty of Commercial Sciences in Istanbul Commerce University. He has
  • been entitled to be a Professor since 2004. He conducts research in numerous topics specifically in
  • the area of corporate finance.
  • Asl ı AYBARS - asli.aybars@marmara.edu.tr
  • She is a Ph. D. at Marmara University, Faculty of Business Administration. She accomplished her Ph.
  • D. degree in Accounting and Finance at Marmara University Institute of Social Sciences in 2013. She
  • pursues her research in the area of corporate finance.
  • Serkan YEŞİLYURT- serkan.yesilyurt@eas.bahcesehir.edu.tr
There are 76 citations in total.

Details

Primary Language English
Journal Section Makale Başvuru
Authors

A. Osman Gürbüz

Aslı Aybars

Serkan Yeşilyurt

Publication Date February 13, 2016
Published in Issue Year 2016 Volume: 12 Issue: 45

Cite

APA Gürbüz, A. O., Aybars, A., & Yeşilyurt, S. (2016). THE ROLE OF AGENCY COSTS IN EXPLAINING FINANCIAL PERFORMANCE DIFFERENCES: AN EMPIRICAL ANALYSIS ON SELECTED PUBLIC FIRMS IN BRIC COUNTRIES. Öneri Dergisi, 12(45), 187-210. https://doi.org/10.14783/od.v12i45.1000020010

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Öneri

Marmara UniversityInstitute of Social Sciences

Göztepe Kampüsü Enstitüler Binası Kat:5 34722  Kadıköy/İstanbul

e-ISSN: 2147-5377