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Agency cost and long run performance of debt issuers


Ibrahim, Yusnidah and Uddin, Md Mohan and Taufil Mohd, Kamarun Nisham and Minai, Mohd Sobri (2011) Agency cost and long run performance of debt issuers. In: 2011 International Conference on Business and Economics Research (ICBER 2011) , 21st to 23rd October 2011 , Cairo, Egypt .

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Abstract

This study focuses on the agency costsexplanation of long run performance of debt issuers based on debt issuance data in Malaysia during January 2001 to October 2009.Long run performance is measured (BHAR) while growth opportunity (GO), ownership concentration (OC) and free cash flow (FCF) are adopted as the proxy for agency costs.Using linear regression method, the study finds that BHAR is positively influenced by GO and OC and negatively influenced by FCF which support the agency cost explanation of capital structure. Increase inthe performance of debt issuersis found to be associated with the monitoring role of debt. Debt issuers with more concentrated ownership are found to be benefitted from the issuancethrough the reduction of agency costs.

Item Type: Conference or Workshop Item (Paper)
Additional Information: ISSN: 2010-023X
Uncontrolled Keywords: corporate finance, capital structure, agency theory, ownership concentration, bonds
Subjects: H Social Sciences > HG Finance
Divisions: School of Economics, Finance & Banking
Depositing User: Prof. Dr. Yusnidah Ibrahim
Date Deposited: 25 Sep 2013 00:47
Last Modified: 24 Apr 2016 02:59
URI: http://repo.uum.edu.my/id/eprint/9095

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