Does Firm Location Affect the Agency Cost between Boards and Minority Equity Holders?

• Main Authors: Yi-Huan Chang, 張翊桓
• Other Authors: 廖咸興
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/54125249309753847366

碩士 === 國立臺灣大學 === 財務金融學研究所 === 101 === This study explores the relation between the agency problems between boards and minority equity holders (later denoted as B-E agency problem) and firm location by using the B-E agency proxy developed by Taylor (2010). By employing CEO turnover data in the past 20 years, we hypothesize that remotely located firms are more likely to suffer higher B-E agency problem because geographic location limits the ability of minority equity investors to monitor the boards of remotely located firms. We use five different variables to represent location and remoteness of the firm’s headquarters. The empirical results of this study show that a firm’s location significantly affects its B-E agency problem. Higher distance to major city worsens the B-E agency problem.