Can Debt and Dividend Policies Substitute Insider Ownership in Controlling Equity Agency Conflict ?  

Oleh:

Tandelilin, Eduardus ; Wilberforce, Turyasingura

Jenis: Article from Journal - ilmiah nasional - tidak terakreditasi DIKTI
Dalam koleksi: International Journal of Business vol. 4 no. 1 (Jan. 2002), page 31-44.
Topik: POLICIES; agency conflict; debit policy; dividend policy; insider ownership; simultaneous; equation
Fulltext: II51.1 4(1) 0102 31-43.pdf (265.06KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: II51.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

Lihat Detail Induk

Isi artikel

The separation of ownership and control in modern corporations creates two parties namely the managers who are the agents and the owners who are the principals. Usually, the agents do not work in the interests of the principals, which leads to the equity agency conflict. Agency theory suggests several ways of reducing this agency conflict which include increased insider ownership, debt policy and dividend policy among others. Several researches on these three policies have revealed an interdependent relationship among them. This study build on this relationship to test whether the financial policies - debt and dividend policies can be substitutes for increased insider ownership in an effort to control agency conflict. Using a simultaneous equation analysis on cross sectional firm data, the results indicate that susbtitutability between debt and insider ownership occurs, but no such relationship was found between dividend and insider ownership. This is supported by the non - monotonic relationship between dividend policy and insider ownership. The findngs also point to the fact that in a bid to control equity agency conflict, the use of debt exacerbates the debt agency conflict.

Opini Anda

Klik untuk menuliskan opini Anda tentang koleksi ini!

Kembali