Market Competition, Managerial Incentives and Agency Cost

2019 ◽  
Vol 21 (4) ◽  
pp. 937-955 ◽  
Author(s):  
Rayenda Khresna Brahmana ◽  
Hui San Loh ◽  
Maria Kontesa
Keyword(s):  
Positive Relationship ◽  
Market Competition ◽  
Managerial Incentives ◽  
Agency Cost ◽  
Product Market Competition ◽  
Director Compensation ◽  
Listed Firms ◽  
Board Of Director ◽  
Competitive Firm ◽  
Size Firm

This study investigates the determinants of board of director compensation from the view of strategic management. Specifically, this study examines the association between product market competition and directors’ compensation for a sample of 524 listed firms in Malaysia from 2010 to 2014. We find that there is a positive relationship between a competitive firm and its compensation to its directors. Our research indicates that managerial incentives reflect more of talent appreciation, rather than purely for acknowledging better performance or a bigger size firm. This research contests the use of agency theory and managerialism in explaining directors’ compensation, especially for the developing country context of Malaysia. Our findings also imply that firms may pay higher compensation in a competitive market.

Determinants of Auditor Choice in Non-Financial Listed Firms on the Vietnamese Stock Market

2022 ◽  
Vol 13 (2) ◽  
pp. 0-0
Keyword(s):  
Firm Growth ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Financial Statements ◽  
Regulatory Environment ◽  
Listed Firms ◽  
Auditor Choice ◽  
Audit Firms ◽  
Size Firm ◽  
Selection Of

Audit plays an important role in maintaining and issuing high-quality financial statements. This article investigates the factors that can affect auditor choice in developing countries. The authors utilize STATA to test Binary Logistic on a sample of Vietnamese listed firms data during the period between 2014 and 2017. These studies have examined the characteristics of the firm itself or the client's characteristics, prompting the process of selecting an auditor in the same regulatory environment. The results present that there is a positive relationship between firm size, firm growth, and auditor choice. While financial leverage has a negative relationship with the selection of audit firms.

Investor Protection and the Substitution Effect of Corporate Governance and Product Market Competition on Firm Value

2020 ◽  
pp. 0148558X2093679
Author(s):  
Joseph R. Rakestraw
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Market Competition ◽  
Investor Protection ◽  
Cost Benefit ◽  
Product Market ◽  
Substitution Effect ◽  
Agency Cost ◽  
Product Market Competition ◽  
Country Level

International research has firmly established that a substitute relationship exists between corporate governance and product market competition on firm value. In this study, I reexamine this substitution effect in an international setting, allowing the relation to vary with investor protection. As hypothesized, I find that investors place a higher value on the substitution effect of corporate governance and product market competition in countries where the legal and regulatory mechanisms to protect investors are weak. This finding suggests that country-level investor protection has a moderating role in affecting the substitution between product market competition and corporate governance on firm value. These results, which are robust to several sensitivity tests and alternative specifications, are consistent with an equity agency cost benefit, resulting from product market competition and corporate governance, which is valued more by investors where investor protection is weak.

scholarly journals Product Market Competition, Managerial Incentives and Firm Valuation

2009 ◽  
Vol 17 (2) ◽  
pp. 331-366 ◽  
Author(s):  
Stefan Beiner ◽  
Markus M. Schmid ◽  
Gabrielle Wanzenried
Keyword(s):  
Market Competition ◽  
Product Market ◽  
Managerial Incentives ◽  
Firm Valuation ◽  
Product Market Competition

scholarly journals Product-market competition, internal control quality and audit opinions. Evidence from Chinese listed firms

2020 ◽  
Vol 23 (1) ◽  
pp. 102-112
Author(s):  
Ling Zhang ◽  
Wen Chen ◽  
WUN HONG SU
Keyword(s):  
Internal Control ◽  
Market Competition ◽  
Product Market ◽  
Product Market Competition ◽  
Certified Public Accountant ◽  
Listed Firms ◽  
Control Quality ◽  
Audit Opinions ◽  
Public Accountant

Sobre la base de los datos de las empresas que cotizan en los mercados bursátiles A de Shangai y Shenzhen entre 2007 y 2015, este estudio examina las relaciones entre la calidad del control interno, la competencia en el mercado de productos y las opiniones de auditoría. Los resultados empíricos revelan que (1) cuanto mejor sea la calidad del control interno de las empresas que cotizan en bolsa, más probable es que un contador público certificado emita una opinión sin modificaciones; (2) la competencia en el mercado de productos se asocia positivamente con las opiniones sin modificaciones; (3) la competencia en el mercado de productos debilita la relación positiva entre la calidad del control interno de las empresas que cotizan en bolsa y la probabilidad de que un contador público certificado emita una opinión sin modificaciones; y (4) el impacto significativo de la competencia en el mercado de productos sobre la relación entre el control interno de la calidad y las opiniones sin modificaciones sólo existe en las industrias no monopolísticas. Based on data on listed firms in the Shanghai and Shenzhen A-share stock markets from 2007 to 2015, this study examines the relations among the quality of internal control, product-market competition and audit opinions. The empirical results reveal that (1) the better the quality of the internal control of listed firms is, the more likely a certified public accountant will be to issue a unmodified opinion; (2) the product-market competition is positively associated with unmodified opinions; (3) the product-market competition weakens the positive relation between the quality of the internal control of listed firms and the likelihood that a unmodified opinion will be issued by a certified public accountant; and (4) the significant impact of product-market competition on the relation between internal control quality and unmodified opinions exists only in non-monopoly industries.

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