Open AccessFamily companies and the costs of governance mechanisms: A discriminant analysis for a sample of Algerian companies
Author(s) -
Mohamed Cherif Benzouai
Publication year - 2018
Publication title -
journal of finance and corporate governance
Language(s) - English
Resource type - Journals
eISSN - 2602-5655
pISSN - 2661-7501
DOI - 10.54960/jfcg.v2i1.18
Subject(s) - corporate governance , discriminant function analysis , linear discriminant analysis , sample (material) , business , agency cost , accounting , multiple discriminant analysis , principal–agent problem , agency (philosophy) , function (biology) , discriminant , finance , statistics , shareholder , mathematics , sociology , computer science , artificial intelligence , social science , chemistry , chromatography , evolutionary biology , biology
This paper aims at shedding light on the importance of corporate governance mechanisms costs when considering the decision of adoption of those mechanisms by companies, by relying on the discriminant analysis of a sample of 112 Algerian unlisted companies. The special nature of the agency problem in family companies allows it to adopt a different and lower cost governance structure than other companies. The study found that the variables that reflect corporate governance mechanisms have a significant effect in the discriminant function between the family companies and the rest of the companies.