Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10480650 | Pacific-Basin Finance Journal | 2005 | 24 Pages |
Abstract
Financial economics often assumes that equity agency costs increase with the separation of ownership and control. This paper tests this relationship using a survey sample of approximately 3800 Australian small and medium enterprises for 1996-1997 and 1997-1998. Following Ang et al. [J. Finance 55 (2000) 81], we estimate a zero equity agency cost benchmark (in terms of operating expenses and asset utilization ratios) for the 100% owner-manager firm. We then examine how agency costs change when ownership and control are separated. We report a positive relationship between equity agency costs and the separation of ownership and control.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Grant Fleming, Richard Heaney, Rochelle McCosker,