Product market competition and agency costs
Webb6 jan. 2024 · As a market competition mechanism, product market competition can increase the probability that a firm with high costs becomes unprofitable and must be liquidated, inducing managers to work hard to keep their jobs, and to avoid the disutility of liquidation. This is the threat of liquidation effect of product market competition. WebbWe model the effects of competition on managerial efficiency and isolate the agency effect of competition, present only in firms subject to agency costs, from the direct pressure …
Product market competition and agency costs
Did you know?
WebbProduct market competition, efficiency and agency costs: an empirical analysis Rachel Griffith Institute for Fiscal Studies June 2001 Abstract Policy makers in Europe have … WebbPRODUCT MARKET COMPETITION AND AGENCY COSTS* JEN BAGGSt JEAN-ETIENNE DE BETTIGNIES[We model the effects of competition on managerial efficiency and isolate the agency effect of competition, present only in firms subject to agency costs, from the direct pressure effect of competition, which is present in all firms.
Webb1 jan. 2024 · Product market competition has profound implications for financial reporting quality ( Cheng, Man, & Yi, 2013 ), for real economic decisions ( Jiang, Kim, Nofsinger, & Zhu, 2015 ), and for other corporate governance arrangements ( Giroud & Mueller, 2010 ). Webb18 juni 2024 · Specifically, this study examines the association between product market competition and directors’ compensation for a sample of 524 listed firms in Malaysia from 2010 to 2014. We find that there is a positive relationship between a competitive firm and its compensation to its directors.
Webb4 apr. 2024 · Econometric results confirm that the product market competition is a substitute for dividends as well as for internal corporate governance mechanisms. It is found that non-competitive firms tend to pay significantly higher dividends than competitive firms. WebbJensen and Meckling (1976) argue that agency costs are not dependent on product market competition. However, elsewhere in the economics literature, theoretical analysis and empirical research have indicated that product market competition reduces agency costs by reducing the marginal cost of eliciting effort from agents.
Webb1 juni 2011 · Product market competition could create such cost pressures from client companies because where there is competition it will make managers more sensitive to …
Webb1 mars 2024 · Because the balance between the discipline and agency-cost effects differs at different levels of leverage and competition, we demonstrate that the effects on financial distress hazard are non-monotonic in a cross section of firms faced with different levels of leverage and product-market competition. The discipline and agency-cost effects of ... flash results zandschulpWebbOn the one hand increasing competition lowers firm's profits and thus reduces incentives to exert effort (the Schumpeterian effect), on the other hand it reduces agency costs (or increases the risk of bankruptcy) thus increasing incentives to exert effort. checking java version on windows 11Webbproduct market competition and agency costs † JEN BAGGS Faculty of Business, University of Victoria, PO Box 1700, STN CSC, Victoria, British Columbia, V8W 2Y2, … flash results txWebbThese results suggest that product market competition can play an important role in reducing agency costs and may explain some of the poor performance of European … checking java home path on macWebb1 jan. 2024 · The main purpose of this report is to discuss how the key elements of Globalization like cost, competitive, market and government drivers are affecting the … checkingjobs.comWebbOn the one hand increasing competition lowers firm's profits and thus reduces incentives to exert effort (the Schumpeterian effect), on the other hand it reduces agency costs (or … flash results westWebb31 aug. 2024 · Product market competition has been identified as one of the most powerful corporate governance tools for motivating managers to maximize firm value. Consistent with this view, a large body... checking jamb caps