Agency theory

Agency theory

The analysis of principal-agent relationships, in which one person, an agent, acts on behalf of another person, a principal.

Agency Theory

The study of the relationship between an agent (such as a broker) and a principal (such as a client). Agency theory seeks to explain the relationship in order to recommend the appropriate incentives for both parties to behave the same way, or more specifically, for the agent to have the incentive to follow the principal's direction. Agency theory also seeks to reduce costs in disagreements between the two.
References in periodicals archive ?
Abstract In this study, we integrate resource dependence theory and agency theory to argue that state ownership has a dual (inducement and constraint) effect on emerging market firms' export performance.
It is this established narrative that Kasurak takes aim at, and using Feaver's agency theory sets out to demonstrate it was in fact not the civilian leadership but rather the army that was "the author of its own decline," beginning not after unification but instead right after the Second World War.
It is possible that the reliance on agency theory and the assumption of a positive linear relationship between ownership and performance has been the cause of confusion.
Agency theory is a main theory in Corporate Governance literature (Kholeif, 2009).
Studies based on agency theory provide evidence of ownership structure as a determinant of outward foreign direct investment (FDI).
See end note (c) for more information on agency theory problems.
Agency theory (agent) has been appeared in different texts including the economy, assurance, management and accounting and Namazi [10].
In this study, the relationship between green management practices and CEO compensation is examined by expanding on agency theory and including insights from institutional theory.
Finally, according to Agency theory, the problems of information asymmetry implicit in relationships between owners/managers and creditors can also affect firm investment (Jensen, Meckling 1976).
This is because according to Markides and Singh (1997), agency theory is the most prominent explanation for corporate restructuring in academic literature.
According to agency theory, ownership structure as part of corporate governance is as a result of efforts to minimize the costs associated with the separation of ownership and control.