Agency

Working Paper

Private Benefits and Corporate Investment and Financing Decisions: The Case of Corporate Philanthropy

We find that corporate giving represents a private benefit of control that distorts corporate investment and financing activity, consistent with free cash flow agency theory. Corporate giving discourages managers from pursuing external financing...Read more

Ronald Masulis
05 April 2019

Controlling Shareholders in the Twenty-First Century: Complicating Corporate Governance Beyond Agency Costs

By the end of the twentieth century, the then-dominant literature on “law and finance” assumed that concentrated ownership was a product of deficient legal systems that did not sufficiently protect outside investors. At the same time,...Read more

Mariana Pargendler
10 December 2019

The Agency Costs of Activism: Information Leakage, Thwarted Majorities, and the Public Morality

Few doubt that hedge fund activism has radically changed corporate governance in the United States -- for better or for worse. Proponents see activists as desirable agents of change who intentionally invest in underperforming
companies to...Read more

John Coffee
22 November 2017

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