Agency theory: background and epistemology

2016 ◽  
Vol 22 (4) ◽  
pp. 437-449 ◽  
Author(s):  
Josh Bendickson ◽  
Jeff Muldoon ◽  
Eric W. Liguori ◽  
Phillip E. Davis
Keyword(s):  
Agency Theory ◽  
Industrial Revolution ◽  
Stock Exchange ◽  
Chicago School ◽  
Content Type ◽  
Management History ◽  
The Great Depression ◽  
Management Approaches ◽  
Historical Accounts ◽  
Shed Light

Purpose By revisiting the agency theory literature, this paper aims to both incrementally advance historical viewpoints and reveal four prominent influences on agency theory: Weber and Simon, The Great Depression, Cooperation and the Chicago School. This is critical given that understanding the history behind the authors’ major theoretical lenses is fundamental to using these theories to explain various phenomena. Design/methodology/approach Drawing on a plethora of archival sources and following the influence-mapping approach used by other management history scholars, this manuscript synthesizes historical accounts and archival information to provide a clearer picture of the major historical influences in the formation of agency theory. Findings We shed light on four areas related to management history that helped propel agency theory. Whereas past scholarship has not recognised them as influencers, we find and show how the industrial revolution, unionization, the stock exchange and other management approaches all played a role in the development of agency theory’s core tenants. Originality/value We extend upon the influential people and events that shaped agency theory, thus providing a fuller understanding of the theory’s usefulness. Moreover, we fill in gaps enabling scholars to better understand the context in which the core tenants of agency theory were developed.

The Fourth Industrial Revolution and private commercial banks: the good, bad and ugly

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Asif Rahman ◽  
Md. Joynal Abedin
Keyword(s):  
Commercial Banks ◽  
Industrial Revolution ◽  
Banking Sector ◽  
Stock Exchange ◽  
Vital Role ◽  
Commercial Banking ◽  
Digital Products ◽  
Content Type ◽  
Traditional System ◽  
Fourth Industrial Revolution

Purpose This study aims to assess how new and emerging technologies can contribute to achieving the financial goals of the private commercial banking sector in Bangladesh. It considers the perception among the top management about the Fourth Industrial Revolution (4IR) and further measures the readiness of private commercial banks (PCBs) to become resilient. Design/methodology/approach This study attempts to measure the perception and readiness of the commercial banking sector because of the 4IR based on the stratified sampling method. The research is qualitative and selected PCBs listed in the Dhaka Stock Exchange. 4IR in the context of the banking sector in Bangladesh is a problem that has not been studied more clearly, intended to establish priorities, develop operational definitions and improve the final research design. Findings This research has identified a significant gap of study in the preparedness among the private commercial banking sector in Bangladesh to confront the 4IR while indicating the most significant risks and managerial insights. The findings show technologies will dramatically change the nature of work. Traditional system of banking from the branch will be shifting into banking from everywhere. Hence, digital products and services will foster value-driven business. The result of the study also states the readiness of the banking sector is in the preliminary stage and endorses some of the coping approaches. Research limitations/implications Different schools of thought regarding the role of the 4IR and its future consequences have been observed. The corporate sector in Bangladesh has an inclusive lack of understanding regarding the 4IR. Practical implications The insights may provide directions to banking financial institutions of Bangladesh to thrive during the 4IR. This study is intended to assist policymakers, decision-makers and employees of PCBs to increase awareness and preparedness for future challenges that may appear from the 4IR where the 41 competitive PCBs play vital role in turning the fast emerging Bangladesh economy. Originality/value The contribution of this paper associates with academics and bankers to increase understanding of coping in the context of the escalating use of emerging technology-driven banking services within the PCBs in Bangladesh by determining perception and testing different forms of readiness including a variety of important outcomes such as risks.

Looking back

2015 ◽  
Vol 21 (4) ◽  
pp. 410-420 ◽  
Author(s):  
Jay H. Hardy III ◽  
Carter Gibson ◽  
M. Ronald Buckley
Keyword(s):  
Public Administration ◽  
Historical Analysis ◽  
Early Years ◽  
Historical Events ◽  
Content Type ◽  
Management History ◽  
Relevant Today ◽  
Management Concepts ◽  
Future Events ◽  
Historical Accounts

Purpose – The purpose of this paper is to reflect on the early direction and maturation of the Journal of Management History (JOMH), evaluate the lasting impact of this primary work and identify implications of findings of this paper for future developments in the study of management history. This article provides a review of the first five years (1995-1999) of the JOMH. Design/methodology/approach – Articles published in the JOMH between the years of 1995 and 1999 were reviewed, and unifying thematic categories were developed. Two independent raters, then, sorted the articles into their respective categories. After agreement was established, general trends in the JOMH’s early direction and focus were considered. Lasting impact was evaluated using citations in Google Scholar by category and year. Similarities among the most cited articles during this period are discussed. Findings – The early years of the JOMH were characterized by shifts in contributions from various management and public administration perspectives, a transition from an early emphasis on historical individuals to a broader focus on topics and ideas and a balance between describing historical accounts (i.e. retelling or recording historical events and individuals) and historical analysis (i.e. considering the influence of historical events and ideas on future events and modern perspectives). The most influential early contributions to the JOMH were articles that focused on the histories of specific management concepts, an approach that is still important and relevant today. Originality/value – This review provides insights into the development and maturation of the JOMH following its formation.

The next industrial revolution

2020 ◽  
Vol 36 (6) ◽  
pp. 29-31
Keyword(s):  
Industrial Revolution ◽  
Global Financial Crisis ◽  
Health Crisis ◽  
Content Type ◽  
The Great Depression ◽  
The Us ◽  
Modern Business ◽  
Pertinent Information ◽  
The Global Financial Crisis ◽  
Political Economic

Purpose Reviews the latest management developments across the globe and pinpoints practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings The global health crisis that ensued from the first transmissions in China in late 2019 of the Coronavirus provided a shockwave that was perhaps unprecedented in modern business history. Like the Great Depression in the US in the 1920s and 1930s and the global financial crisis of 2008, the ensuing events highlighted a number of underlying issues across many sectors and economies. In the immediate aftermath of the crisis, there was no shortage of political, economic, social and environmental reparations to be made to ensure that such widespread devastation could not be repeated. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Determinants of audit report lag: evidence from Palestine

2016 ◽  
Vol 6 (1) ◽  
pp. 13-32 ◽  
Author(s):  
Yousef Mohammed Hassan
Keyword(s):  
Agency Theory ◽  
Audit Committee ◽  
Stock Exchange ◽  
Arab World ◽  
Annual Reports ◽  
Audit Report ◽  
Content Type ◽  
Middle East Countries ◽  
Corporate Governance Mechanisms ◽  
Using Data

Purpose – The purpose of this paper is to employ agency theory to identify the determinants of the audit delay among Palestinian companies listed on Palestine Stock Exchange (PSE). Design/methodology/approach – Drawing on the agency theory, eight hypotheses are tested using data collected from the year 2011 annual reports for all the 46 listed companies on PSE. Multiple regression analysis was performed to identify the influence of a set of company characteristics, ownership structure variables, and corporate governance mechanisms. Findings – The result of the analysis demonstrated that the audit reporting delay is influenced by the board size, corporate size, status of audit firm, company complexity, existence of audit committee, and ownership dispersion. Research limitations/implications – The main shortcoming of the current study is that the analysis covered the Palestinian companies’ annual reports for only one year. A time series analysis might give fuller and understandable picture about the audit report lag (ARL) determinants. The outcome of the study can be used by companies’ managements and policy makers in Palestine to improve future disclosure. Originality/value – This paper adds to the limited audit delay literature in Middle East countries in general and Arab World in particular. This paper not only examines the determinants of the audit delay but also attempts to theorize such delay.

The influence of Egyptian context on the trade-off between earnings management approaches

2019 ◽  
Vol 17 (1) ◽  
pp. 133-168 ◽  
Author(s):  
Nargis Kaisar Boles Makhaiel
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Cash Flows ◽  
Earning Management ◽  
Management Approach ◽  
Trade Off ◽  
Content Type ◽  
Economic Context ◽  
Operational Activities ◽  
Management Approaches

PurposeThis paper aims at studying earnings management phenomenon in its wider social and economic context to get better understanding for the following points: whether there is “one-size-fits-all” earning management approach which can be widespread applied among nations and whether the Egyptian context affects managers’ trade-off between three different earnings management approaches: accounting, operational and investment.Design/methodology/approachThe paper adopts interpretive approach and analyses data from official documents and 34 interviews with company executives; financial analysts; external auditors; and Stock Exchange regulators to inform our understanding of the influence of the Egyptian context on the trade-off between earnings management approaches.FindingsThe results show that there is no application for “one-size-fits-all” earning management approach; unlike the developed cultures, where R&D expenses and overproduction are extensively used for boosting profits, in Egyptian context they are not valid tools. The findings indicate that the Egyptian political and economic context remarkably affect managers trade-off earnings management approaches, leading executives to prefer operational manipulation compared with others.Originality/valueThis paper extends but adds to the literature by shedding light on the different implications of earning management theories based on the variation in the political, economic and operational contexts of firms; identifying that operational cash flows matter more to managers than accounting profits; focusing on the fact that managers differentiate and compare between three various earning management approaches: accounting techniques, investment activities and operational activities; and showing that changes in political and economic Egyptian context makes operational manipulation favorable to be adopted compared with others. It also overcomes the criticism of New Institutional Sociology Theory.

The effects of board attributes on Sukuk rating

2018 ◽  
Vol 11 (2) ◽  
pp. 312-330 ◽  
Author(s):  
Mohamed Abulgasem Elhaj ◽  
Nurul Aini Muhamed ◽  
Nathasa Mazna Ramli
Keyword(s):  
Agency Theory ◽  
Stakeholder Theory ◽  
Stock Exchange ◽  
The Body ◽  
Board Independence ◽  
Strategic Decisions ◽  
Board Size ◽  
Content Type ◽  
Logit Regression Model ◽  
The Impact

Purpose The purpose of this paper is to investigate the effect of board attributes on Sukuk rating in firms listed in Bursa Malaysia (Malaysian Stock Exchange) during the period of 2008 to 2013. Design/methodology/approach This study uses ordinal logit regression model to examine the influence of board attributes (CEO-chairman duality, board size and board independence) on the dependent variable (RATING). Findings The findings of this paper generally support the agency theory and stakeholder theory. Results show that after controlling for firm characteristics, the Sukuk rating is positively associated with CEO-chairman duality, board size and board independence; and negatively correlated with leverage while positively related to profitability and size. The findings of this study also provide evidence that having two positions in an organization as CEO and chairman could have added higher responsibility towards making corporate decisions and provide better Sukuk rating performance. In addition, findings show that the larger the board size, the better Sukuk rating. Also, higher board independence enjoys higher rating. Research limitations/implications This study was limited to the investigation of the relationship between board attributes (CEO duality, board size and board independence) on Sukuk ratings using aggregate data from 2008 to 2013 among Malaysian Sukuk issuers. Practical implications The findings of this paper describe the impact of board attributes on Sukuk rating in Malaysian Sukuk market which in turn gives the useful insights to many of the actors in the markets such as issuers, investors and policymakers which can be relied upon in making strategic decisions to issue and invest in Islamic bonds in Malaysian market. In addition, the findings could prove to be useful also for regulators because they are responsible for the acceptable level of corporate governance standards. Originality/value This study contributes to the body of knowledge by focusing heavily on enhancing Sukuk ratings by reducing conflict between managers and Sukuk holders in Malaysia. Additionally, this study benefits from the agency theory and stakeholder theory to provide evidence on the effect of board attributes on Sukuk rating.

Analisis Komparatif Return Saham Dan Volume Perdagangan Saham Sebelum dan Sesudah Harbolnas Pada Perusahaan Dagang Yang Terdaftar Di Bei

2020 ◽  
Vol 17 (2) ◽  
Author(s):  
Devy Putri Milanda ◽  
Taufan Adi Kurniawan
Keyword(s):  
Linear Regression ◽  
Abnormal Return ◽  
Stock Return ◽  
Industrial Revolution ◽  
Online Shopping ◽  
Stock Exchange ◽  
Trade Volume ◽  
Volume Activity ◽  
Significance Level ◽  
Before And After

The industrial revolution resulted in several industries changing their management in order to survive, one of the industries that was affected quite considerably was the trading industry. This study aims to analyze stock return and Trade Volume Activity (TVA) of trading companies in Indonesia Stock Exchange (IDX) before and after Harbolnas (Hari Belanja Online Nasional) or National Online Shopping Days. The samples are all trading companies that have listed on the IDX in the year 2019. This study use multiple linear regression with a significance level of 5%. The results show there are no significant differences in the abnormal return before and after Harbolnas, and there are no significant differences in the TVA before and after the harbolnas

Absence of the weekend effect and industry-style portfolios

2019 ◽  
Vol 12 (4) ◽  
pp. 463-475
Author(s):  
Selma Izadi ◽  
Abdullah Noman
Keyword(s):  
New York ◽  
Stock Market ◽  
Structural Breaks ◽  
Stock Exchange ◽  
Structural Break ◽  
Weekend Effect ◽  
Content Type ◽  
Market Portfolio ◽  
The Us ◽  
Using Data

Purpose The existence of the weekend effect has been reported from the 1950s to 1970s in the US stock markets. Recently, Robins and Smith (2016, Critical Finance Review, 5: 417-424) have argued that the weekend effect has disappeared after 1975. Using data on the market portfolio, they document existence of structural break before 1975 and absence of any weekend effects after that date. The purpose of this study is to contribute some new empirical evidences on the weekend effect for the industry-style portfolios in the US stock market using data over 90 years. Design/methodology/approach The authors re-examine persistence or reversal of the weekend effect in the industry portfolios consisting of The New York Stock Exchange (NYSE), The American Stock Exchange (AMEX) and The National Association of Securities Dealers Automated Quotations exchange (NASDAQ) stocks using daily returns from 1926 to 2017. Our results confirm varying dates for structural breaks across industrial portfolios. Findings As for the existence of weekend effects, the authors get mixed results for different portfolios. However, the overall findings provide broad support for the absence of weekend effects in most of the industrial portfolios as reported in Robins and Smith (2016). In addition, structural breaks for other weekdays and days of the week effects for other days have also been documented in the paper. Originality/value As far as the authors are aware, this paper is the first research that analyzes weekend effect for the industry-style portfolios in the US stock market using data over 90 years.

The evolution of the monitoring board in Japan: how the board performs monitoring function in Japanese corporate governance

2019 ◽  
Vol 19 (5) ◽  
pp. 999-1014
Author(s):  
Kohei Miyamoto
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Stock Exchange ◽  
White Paper ◽  
Lifetime Employment ◽  
Content Type ◽  
Legal Reforms ◽  
Legal Evolution ◽  
Commercial Code ◽  
Governance Institutions

Purpose The purpose of this paper is to trace a legal evolution of the monitoring board and to reveal what brought the evolution and what is expected to emerge. The paper points to unique complementarities in Japanese corporate governance institutions and norms which will affect how the monitoring board performs its functions. Design/Methodology/Approach Analysis is based on texts on corporate governance legislations in Japan from the revision of Commercial Code in 1950 to the revision of Companies Act in 2014. Other sources include Tokyo Stock Exchange regulations, White Paper on Corporate Governance and other academic literatures on Japanese corporate governance. Findings Changes of non-legal institutions and norms in Japanese corporate governance necessitated legal reforms toward the monitoring board. Persisting institutions and norms, in particular lifetime employment, influences how the monitoring board performs its functions in Japan. Originality/Value This paper explains how the evolution of the monitoring board in Japan emerged and what will cause different expected functions of the monitoring board in Japan and other jurisdictions.

Disposition effect at the market level: evidence from Indian stock market

2019 ◽  
Vol 12 (2) ◽  
pp. 69-82
Author(s):  
Sravani Bharandev ◽  
Sapar Narayan Rao
Keyword(s):  
Trading Volume ◽  
Stock Exchange ◽  
Reference Points ◽  
Disposition Effect ◽  
Content Type ◽  
Ex Post ◽  
Abnormal Trading Volume ◽  
The Difference ◽  
Trading Volumes ◽  
Indian Stock Market

Purpose The purpose of this paper is to test the disposition effect at market level and propose an appropriate reference point for testing disposition at market level. Design/methodology/approach This is an empirical study conducted on 500 index stocks of NSE500 (National Stock Exchange). Winning and losing days for each stock are calculated using 52-week high and low prices as reference points. To test disposition effect, abnormal trading volumes of stocks are regressed on their percentage of winning (losing) days. Further using ANOVA, the difference between mean of percentage of winning (losing) days of high abnormal trading volume deciles and low abnormal trading volume deciles is tested. Findings Results show that a stock’s abnormal trading volume is positively influenced by the percentage of winning days whereas percentage of losing days show no such effect. Findings are consistent even after controlling for volatility and liquidity. ANOVA results show the presence of high percentage of winning days in higher deciles of abnormal trading volumes and no such pattern in case of losing days confirms the presence of disposition effect. Further an ex post analysis indicates that disposition prone investors accumulate losses. Originality/value This is the first study, which proposes the use of 52-week high and low prices as reference points to test the market-level disposition effect. Findings of this study enhance the limited literature available on disposition effect in emerging markets by providing evidence from Indian stock markets.

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