The Agency Cost from the Point of View of Financial Markets
AbstractWe examine agency cost in the multibusiness enterprises (hereinafter “MBE”). Our goal is to find out, whether is there a positive relationship between the complexity of MBE and agency cost. Results are ambiguous, nevertheless we got an indirect indication that more complex MBE bring more advantages than disadvantages and that the avoidable agency costs are effectively eliminated at the lower levels of MBE structure. It emerges then that the main reason for agency cost is information asymmetry and the largest part of avoidable agency cost emerges in the highest levels of corporate hierarchy.
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Bibliographic InfoArticle provided by University of Economics, Prague in its journal Český finanční a účetní časopis.
Volume (Year): 2011 (2011)
Issue (Month): 4 ()
Postal: Český finanční a účetní časopis, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3
Find related papers by JEL classification:
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- M16 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - International Business Administration
- M50 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - General
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