充满期待关于资本结构中代理成本理论的影响大学毕业论文外文文献翻译及原文

2021年1月19日发(作者：library是什么意思)





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业

设

计（论文）

外

文

文

献

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文献、
资料中文题目：
关于资本结构中代理成本理论的影响

文献、
资料英文题目：
The
Impact
of
Capital
Structure
on
Agency
Costs
文献、资料来源：

文献、资料发表（出版）日期：

院

（部）
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专

业：

班

级：

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名：

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指导教师：

翻译日期：
2017.02.14





The Impact of Capital Structure on Agency Costs
[Abstract]
This
paper
aims
to
provide
empirical
evidence
on
the
agency
costs
hypothesis
which
suggests that increase of leverage may reduce agency costs. Both multivariate tests and univariate tests
are employed in this study. The multivariate tests reveal that general relationship between leverage and
agency costs is significantly negative. Univariate tests are further used to assess whether agency costs
are significantly different when a firm has a relatively higher debt to asset ratio from when it is less
leveraged.
Similar
supporting
evidence
is
found
for
the
agency
costs
hypothesis.
Moreover,
results
from the univariate tests also indicate that this general negative relationship no longer holds when an
extremely high level of leverage is present.

[Keywords] Agency costs, Leverage, Agency costs hypothesis, and Opposite effect

1. Introduction

In
their
seminal
work,
Jensen
and
Meckling
(1976)
point
out
that
agency
costs
occur
due
to
incomplete alignment of the agent’s and the

owner’s interests. The separation of ownership and control
may
generate
agency
costs.
Two
types
of
agency
costs
are
identified
in
the
paper
by
Jensen
and
Meckling
(1976):
agency
costs
derived
from
conflicts
between
outside
equity
holders
and
owner-managers, and conflicts between equity holders and debt holders. From then on, a great amount
of
research
has
been
devoted
to
demonstrate
the
interaction
between
agency
costs
and
financial
decisions, governance decisions, dividend policy, and capital structure decisions.

Much empirical evidence collected by researchers, for example, Ang et al. (2000), and Fleming et
al.
(2005),
shows
that
agency
costs
generated
from
the
conflicts
between
outside
equity
holders
and
owner-manager could be reduced by increasing the owner-
managers’ proportion in equity, i.e., agency
costs vary inversely with the manager’s ownership. However, the conflicts between equity holders and
debt holders would be more complicated. Theoretically, Jensen and Meckling (1976) argue that there
should be an optimal capital structure, under which the lowest agency costs of a firm can be deduced
from an independent variable ---
“the ratio of outside equity to the whole outside financing”. The locus
of
agency
costs,
which
is
equal
to
agency
costs
of
outside
equity
and
the
ones
of
debt,
would
be
a
convex curve. This implies that agency costs should not be monotonic any more.

Some researchers such as Grossman and Hart (1982); Williams (1987), argue that high leverage
reduces agency costs and increases firm value by encouraging managers to act more in the interests of
equity holders. This argument is known as the
agency costs hypothesis
. Higher leverage may reduce
agency
costs
through
the
monitoring
activities
by
debt
holders
(Ang
et
al.,
2000),
the
threat
of
liquidation
which
may
cause
managers
to
lose
reputation,
salaries,
etc.
(William,
1987),
pressure
to
generate
cash
flow
for
the
payment
of
interest
expenses
(Jensen
1986),
and
curtailment
of
overinvestment (Harvey et al., 2004).


However, as the proportion of debt in the capital structure increases beyond a certain point, the
opposite
effect
of
leverage
on
agency
costs
may
occur
(Altman,
1984
and
Titman,
1984).
When
leverage
becomes
relatively
high,
further
increases
may
generate
significant
agency
costs.
Three
reasons are identified in the literature which can cause this opposite effect: first reason is the increase of
bankruptcy costs (Titman 1984). Second reason is that managers may reduce their effort to control risk
which
result
in
higher
expected
costs
of
financial
distress,
bankruptcy,
or
liquidation
(Berger
and
Bonaccorsi
di
Patti,
2005).
Finally,
inefficient
use
of
excessive
cash
used
by
managers
for
empire
building would also increase agency costs (Jensen, 1986).

2. Literature Review

Jensen and Meckling (1976) identify agency costs derived from conflicts between equity holders
and
owner-
managers
as
“residual
loss”
which
means
agent
consumes
various
pecuniary
and
non-pecuniary benefits from the firm to maximize his own utility. Related to this issue, Harris & Raviv
(1990), Childs et al. (2005) and Lee et al. (2004) argue that managers always want to continue firm’s
current operations even if liquidation of the firm is preferred by investors. Also, Stulz (1990), Alvarez
et al. (2006) and Kent et al. (2004) suggest the manager always want to invest all available funds even
if
paying
out
cash
is
better
for
outside
shareholders,
and
conflict
between
the
manager
and
equity
holders cannot be resolved through contracts based on cash flows and investment expenditures.

Agency
theory
becomes
more
complicated
when
debt
holders’
interest
is
considered.
As
a
financing strategy, debt is widely discussed in capital structure literatures. Modigliani and Miller (1963)
demonstrate that in order to raise the value of a firm, the amount of debt financing should be as big as
possible for tax subsidyii. However, their theory ignores the agency costs of debt. Theoretically, Jensen
and Meckling (1976) point out that the optimal utilization of debt is when the debt is utilized to the
point where marginal wealth benefits of the tax subsidy are just equal to the marginal wealth effects of
agency costs.

A number of researchers focus on the issue of improvement of firm efficiency by reducing agency
costs. Some of them focus on t
he methods to control managers’ behaviors. For instance, Fama (1980)
conducts a discussion of how the pressure from managerial labor markets helps to discipline managers.
He points out that the key condition to acquire absolute control of managerial behavior through wage
adjustments is that the weight of the wage revision process is sufficient enough to resolve any potential
managerial
incentives
problems.
Another
example
is
Chance’s
(1997)
argument
on
a
derivate
substitution of executive compensation. He suggests giving the manager stocks without right to vote,
which
could
be
beneficial
in
preventing
an
executive
from
wielding
too
much
control.
Other
researchers
are
interested
in
the
optimal
capital
structure
under
which
value
of
firms
could
be
maximized
while
agency
costs
could
be
minimized.
Based
on
these
observations,
the
agency
costs