Corporate Governance, Agency Costs, and Corporate Sustainable Development: A Mediating Effect Analysis
| Autor: | Xiaofeng Hui, Daquan Gao, Songsong Li |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
Finance
Sustainable development 050208 finance Article Subject business.industry Corporate governance Financial risk 05 social sciences Agency cost Dividend policy Modeling and Simulation 0502 economics and business Sustainability QA1-939 Debt ratio business Mathematics 050203 business & management Disadvantage |
| Zdroj: | Discrete Dynamics in Nature and Society, Vol 2021 (2021) |
| ISSN: | 1607-887X 1026-0226 |
| Popis: | The economy is an essential factor in constructing a resilient city, and listed companies play a vital role in the local economy. From the microbehavior of corporate governance, we examine the relationship among corporate governance, agency costs, and corporate sustainable development for a panel sample of 690 state-owned firms in China during 2015–2019. We found that agency costs mediate the relationship between board size, management compensation, debt ratio, dividend policy, and corporate sustainable development. Specifically, decreasing the board size can reduce agency costs and enhance the company’s sustainable development capabilities. The existing compensation system is to the disadvantage of the sustainable development of the company. Increasing the salaries of managers will increase agency costs and reduce the company’s ability to develop sustainably. Although increasing liabilities can reduce agency costs, increasing liabilities will increase financial risks. The bankruptcy costs caused by increasing liabilities are more significant than agency costs, which leads to a decline in the company’s ability to develop sustainably. The implementation of cash dividend policies will help reduce agency costs, thereby increasing their sustainable development capabilities. This also provides new ideas for the Modigliani–Miller (MM) theory and agency cost theory. |
| Databáze: | OpenAIRE |
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