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Ownership structure and board composition: A multi‐country test of agency theory predictions
Author(s) -
Li Jiatao
Publication year - 1994
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090150409
Subject(s) - corporate governance , principal–agent problem , accounting , agency (philosophy) , business , composition (language) , control (management) , affect (linguistics) , state ownership , test (biology) , economics , emerging markets , finance , management , sociology , paleontology , social science , linguistics , philosophy , communication , biology
Patterns of corporate governance and control differ significantly across countries because of national differences in structures of ownership and composition of boards of directors. Based on agency theory, we examine the relationship between ownership structure and the composition of the board of directors of 390 large manufacturing firms based in Japan, Western Europe and the United States. In particular, we examine how ownership concentration, bank control and state ownership affect the percentage of outside directors on the corporate boards. The results show that, consistent with predictions of agency theory, ownership structure has significant effects on board composition.