Search results for "Principal–agent problem"
showing 10 items of 39 documents
The Role of Agency Theory and Perceived Goal Divergence in IS Continuance: A Replication and Extension Study
2016
Past literature recognizes the power of the well-established information systems continuance theory (ISCT) to explain information systems (IS) continuance. In this study, we integrate constructs from two additional perspectives and discuss their interdependencies with ISCT. We argue that the promising framework proposed by Sorebo et al. [1], which extends ISCT with self-determination theory (SDT), can increase its managerial relevance by adding the variables of users' perceptions of goal divergence and risk aversion, selected from agency theory. The empirical results support Sorebo et al.'s main findings and strongly support the impact of perceived goal divergence on e-learning continuance …
Decoding the dynamics of value cocreation in consumer tribes. An Agency Theory approach
2017
In the last decade, marketing studies have tried to define methodologies, models, and tools to support organizations in developing pathways “oriented to” and “based on” the value cocreation. To shed light on these dynamics, using the interpretative lens offered by Agency Theory, this study investigates the sociocultural and cognitive/figurative roots of the process of emergence of consumer tribes in which and by which value cocreation takes place. This paper offers a possible advancement in knowledge useful to define approaches, models, and instruments able to better explain and manage the dynamics of value cocreation.
Strangers on the board
2019
The internationalization of firms has led to boards becoming more international as well. In this study, we investigate the consequences of board internationalization. In particular, by drawing on research on language and board dynamics, we identify theory-based reasons why board internationalization could increase, or decrease, earnings management practices. We use agency theory, stressing how board internationalization may positively or negatively affect monitoring quality of boards. Next to agency theory, we use theories explaining how language differences in the boardroom complicates communication and how differences in language structures (referred to as linguistic relativity in the lit…
Foreign institutional investors and dividend policy: Evidence from China
2017
Abstract This study examines whether foreign institutional investment influences firms’ dividend policies. Using data from all domestically listed nonfinancial firms in China during the period of 2003–2013, we find that foreign shareholding influences dividend decisions and vice versa. Furthermore, changes in dividend payments over time positively affect subsequent changes in foreign shareholding, but the opposite is not true. Our study indicates that foreign institutional investors do not change firms’ future dividend payments once they have made their investment choices in China. Moreover, they self-select into Chinese firms that pay high dividends. Our evidence suggests that in an instit…
Potential agency problems in European club football? The case of UEFA Financial Fair Play
2014
Purpose– With the licence season 2013/2014 onwards Union of European Football Associations (UEFA) Financial Fair Play (FFP) fully came into force. Among other things, FFP demands from the clubs to operate within their own revenues in order to counteract the increasing over indebtedness in European club football. The purpose of this paper is to cast further light on the relationship between UEFA and the clubs as the main actors of FFP and to derive implications to UEFA to improve the efficacy of this regulatory intervention.Design/methodology/approach– This paper explicitly examines the case of FFP from an agency theory perspective. A positivist agency approach is applied in order to describ…
Female directors, capital structure, and financial distress
2021
Abstract The composition of the board of directors is highly relevant to a firm’s capital structure and likelihood of financial distress. This study builds on the complementary proposals of agency theory and gender theories based on gender-differential behavior. We examine whether the gender diversity of the board affects firms’ capital structure (leverage, cost of debt, and debt maturity) and likelihood of bankruptcy. For a sample of European firms over the period 2002 to 2019, we find that the percentage of women directors is the most influential board characteristic in terms of capital structure decisions. This characteristic is negatively related to leverage, cost of debt, and debt matu…
Goal Setting in the Principal-Agent Model: Weak Incentives for Strong Performance
2016
We study a principal-agent framework in which principals can assign wage-irrelevant goals to agents. We find evidence that, when given the possibility to set wage-irrelevant goals, principals select incentive contracts for which pay is less responsive to agents’ performance. We show that average performance of agents is higher in the presence of goal setting than in its absence despite weaker incentives. We develop a principal-agent model with reference-dependent utility that illustrates how labor contracts combining weak monetary incentives and wage-irrelevant goals can be optimal. It follows that recognizing the pervasive use of non-monetary incentives in the workplace may help account fo…
Evaluating the missing links in the relationship between executives' compensation and firm performance
2014
The research on the relationship between executive compensation and firm performance is extensive but has produced inconsistent results and, typically, weak explanatory power. One cause of these results is use of an incomplete theoretical framework that ignores some variables that are related to these two concepts. We explore the missing links between them. The paper contributes to scholarly and practical understanding of this important issue in the literature by extending and combining agency theory, upper echelons theory, and motivation theory perspectives. The paper develops a model that describes and explains the interactive relationship between executive managerial ability, executive c…
The impact of international influence on microbanks’ performance: A global survey
2011
NOTICE: this is the author’s version of a work that was accepted for publication in International Business Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Business Review, 20(2), 163-176. http://dx.doi.org/10.1016/j.ibusrev.2010.07.006 Microbanks serve micro-enterprises and poor people with financial services. This study examines how various aspects of international influence affect microbanks' financi…
Incentives, criminal defence lawyers and plea bargaining
2008
Plea bargaining has become a central feature of criminal procedure in Anglo-Saxon jurisdictions. This paper explores an area seldom discussed in the economic literature on plea bargaining: the influence of the defence lawyer's fee contract on the terms of the bargain. In particular, it uses data from one jurisdiction of the impact on case trajectories of changes in publicly funded defence lawyers’ contracts to test the proposition that the nature of the lawyer's contract influences how cases are managed. An event study methodology on a pooled time-series cross-section data set of case trajectories before and after the change in the nature of the contract is used to examine whether the new p…