Substitution Relationship Between The Agency Problem Control Mechanisms in Malaysia: Simultaneous Equation Analysis

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ID: 72884
2009
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Abstract
This study investigates the substitution relationship (substitutability) between debt policy, insider ownership, and dividend policy as the agency problem control mechanism in Malaysia. If the substitution relationship exists between the agency control mechanisms, the agency problem can be reduced through this relationship. Reducing the agency problem as a result can increase the firm value proxied by Tobin’s Q. This study employs 396 firms sample listed on Malaysian Bourse from 2001 to 2004. To achieves the objectives, this study uses two-stage least square method. The results of this study indicate that the substitutability between debt policy, insider ownership, and dividend policy as agency problem control mechanism does not fully exist in Malaysia. Apparently the substitutability only exists for debt policy and dividend. There is no substitution between debt policy and insider ownership as well as between dividend policy and insider ownership.

Key words: debt policy, insider ownership, dividend policy, agency problem, firm value
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harjito2009substitutionjurnal Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Harjito, D. Agus;
Journal jurnal siasat bisnis
Year 2009
DOI
DOI not found
URL
http://journal.uii.ac.id/index.php/JSB/article/view/403
Keywords
Engineering (General). Civil engineering (General) business finance social sciences management. industrial management business records management social legislation production management. operations management

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