Agency costs and the size discount: evidence from acquisitions

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Many scholars have found a negative relationship between a firm’s size and its value, as measured by Tobin’s q. This result is called the size discount. There are hypotheses about why the size discount exists, but none have been rigorously empirically tested. This paper argues that the size discount...

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Detalles Bibliográficos
Autor: Offenberg, David
Formato: artículo
Fecha de Publicación:2010
Institución:Universidad ESAN
Repositorio:Revistas - Universidad ESAN
Lenguaje:inglés
OAI Identifier:oai:ojs.pkp.sfu.ca:article/270
Enlace del recurso:https://revistas.esan.edu.pe/index.php/jefas/article/view/270
Nivel de acceso:acceso abierto
Materia:Agency costs
size discount
acquisitions
corporate governance
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spelling Agency costs and the size discount: evidence from acquisitions Offenberg, David Agency costssize discountacquisitionscorporate governanceMany scholars have found a negative relationship between a firm’s size and its value, as measured by Tobin’s q. This result is called the size discount. There are hypotheses about why the size discount exists, but none have been rigorously empirically tested. This paper argues that the size discount is created by the inability of shareholders to minimize agency costs in larger companies. Statistical tests suggest that the size discount only appears in large firms with managers that impose excessive agency costs upon their shareholders. Empiricists who use Tobin’s q to proxy for growth opportunities may need a different proxy.Universidad ESAN2010-12-30info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionPeer-reviewed Articleapplication/pdfhttps://revistas.esan.edu.pe/index.php/jefas/article/view/270Journal of Economics, Finance and Administrative Science; Vol. 15 No. 29 (2010): July - December; 73-93Journal of Economics, Finance and Administrative Science; Vol. 15 Núm. 29 (2010): July - December; 73-932218-06482077-1886reponame:Revistas - Universidad ESANinstname:Universidad ESANinstacron:ESANenghttps://revistas.esan.edu.pe/index.php/jefas/article/view/270/158Copyright (c) 2010 Journal of Economics, Finance and Administrative Sciencehttps://creativecommons.org/licenses/by/4.0/info:eu-repo/semantics/openAccessoai:ojs.pkp.sfu.ca:article/2702021-09-15T03:25:57Z
dc.title.none.fl_str_mv Agency costs and the size discount: evidence from acquisitions
title Agency costs and the size discount: evidence from acquisitions
spellingShingle Agency costs and the size discount: evidence from acquisitions
Offenberg, David
Agency costs
size discount
acquisitions
corporate governance
title_short Agency costs and the size discount: evidence from acquisitions
title_full Agency costs and the size discount: evidence from acquisitions
title_fullStr Agency costs and the size discount: evidence from acquisitions
title_full_unstemmed Agency costs and the size discount: evidence from acquisitions
title_sort Agency costs and the size discount: evidence from acquisitions
dc.creator.none.fl_str_mv Offenberg, David
author Offenberg, David
author_facet Offenberg, David
author_role author
dc.subject.none.fl_str_mv Agency costs
size discount
acquisitions
corporate governance
topic Agency costs
size discount
acquisitions
corporate governance
description Many scholars have found a negative relationship between a firm’s size and its value, as measured by Tobin’s q. This result is called the size discount. There are hypotheses about why the size discount exists, but none have been rigorously empirically tested. This paper argues that the size discount is created by the inability of shareholders to minimize agency costs in larger companies. Statistical tests suggest that the size discount only appears in large firms with managers that impose excessive agency costs upon their shareholders. Empiricists who use Tobin’s q to proxy for growth opportunities may need a different proxy.
publishDate 2010
dc.date.none.fl_str_mv 2010-12-30
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv https://revistas.esan.edu.pe/index.php/jefas/article/view/270
url https://revistas.esan.edu.pe/index.php/jefas/article/view/270
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv https://revistas.esan.edu.pe/index.php/jefas/article/view/270/158
dc.rights.none.fl_str_mv Copyright (c) 2010 Journal of Economics, Finance and Administrative Science
https://creativecommons.org/licenses/by/4.0/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv Copyright (c) 2010 Journal of Economics, Finance and Administrative Science
https://creativecommons.org/licenses/by/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Universidad ESAN
publisher.none.fl_str_mv Universidad ESAN
dc.source.none.fl_str_mv Journal of Economics, Finance and Administrative Science; Vol. 15 No. 29 (2010): July - December; 73-93
Journal of Economics, Finance and Administrative Science; Vol. 15 Núm. 29 (2010): July - December; 73-93
2218-0648
2077-1886
reponame:Revistas - Universidad ESAN
instname:Universidad ESAN
instacron:ESAN
instname_str Universidad ESAN
instacron_str ESAN
institution ESAN
reponame_str Revistas - Universidad ESAN
collection Revistas - Universidad ESAN
repository.name.fl_str_mv
repository.mail.fl_str_mv
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Agency costs and the size discount: evidence from acquisitions
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