Market Competition, Managerial Incentives and Agency Cost

Loh, Hui San; Kontesa, Maria

doi:10.1177/0972150919853476

Cited by 5 publications

(4 citation statements)

References 56 publications

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“…The number of items and increasing CSR awareness are the rationales behind those differences. Relatively, our PMC scores of each measure show considerable values, where it has similar value with the reported values by Brahmana et al (2019). This also implies that Malaysia has mediumscale competitive market.…”

Section: Market Competition Measuressupporting

confidence: 80%

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Does Market Competition Motivate Corporate Social Responsibility? Insight from Malaysia

Kontesa¹,

Memarista²

2020

JEM

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This study aims to examine the role of product market competition on Corporate Social Responsibility (CSR) by engaging altruism and utilitarianism views. Using dynamic Generalized Method of Moment panel regression for 524 Malaysian non-financial industry listed companies from 2010 to 2016, we find that firms in a more competitive environments increase their CSR activities. We interpret these results as evidence that CSR is strategically chosen by firms not for the societal benefits, but more on business as usual; a support for utilitarianism view, i.e profit maximizations. It explains the rationale that CSR activities are less employed in a more monopolistic or oligarchic industry. Practically, this study suggests that the CSR activities are forced by market competition. Firms in a more competitive market need CSR as their non-market strategies.

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Section: Market Competition Measuressupporting

confidence: 80%

“…Lastly, our research differs from Fernandez-Kranz and Santalo (2010) in its market competition measures. Instead, we follow the lead of Brahmana et al (2019), Karuna (2007), and Li et al (2013) since their measures better fit the Malaysian context and data availability.…”

Section: Introductionmentioning

confidence: 99%

Does Market Competition Motivate Corporate Social Responsibility? Insight from Malaysia

Kontesa¹,

Memarista²

2020

JEM

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“…Studies reveal that there is a positive relationship between the Economic Value Added (EVA) and executive compensation. A few studies also claim that high-paid managers are more arrogant and are more prone to agency issues (Brahmana et al 2020). Chen et al (2015) suggest using governance measures to bring down agency costs.…”

Section: Economic Value Added and Employee Compensationmentioning

confidence: 99%

Examining the Impact of Agency Issues on Corporate Performance: A Bibliometric Analysis

Khandelwal,

Tripathi,

Chotia

et al. 2023

JRFM

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An agency problem is defined as a conflict of interest arising due to a misalignment of interests among the managers and other stakeholders of the company. This article aims to review the articles addressing the agency problem and their impact on business performance. This article reviews the contributions of prominent theorists on agency problems and agency costs. Using bibliometric attributes of 740 articles from the Scopus database, this study highlights the publishing trend and outlets, along with leading contributors and collaborators in terms of authors, institutions, and countries. This study identifies the clusters through the bibliographic coupling technique and a trend topics analysis. Most researchers have focused on corporate governance and expressed the agency problem as one of the impact areas. This study is unique as no study to date specifically focuses solely on agency theory or the agency problem through the lens of bibliometric analysis. Future research directions on agency problems and their solutions conclude this study.

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“…The other strand of the literature view CEO pay as an incentive or a motivation to stimulate the executives to implement policy action instruments that increase the firm value and profitability (Buck et al, 2008; Chike & Odum, 2018; Edem et al, 2021; Olaniyi & Obembe, 2015; Olaniyi, Obembe, & Oni, 2017; Olaniyi & Olayeni, 2020; Onakoya et al, 2018; Sheikh & Khursheed, 2016). It is believed that professional managers are paid to perform (Bao et al, 2020; Brahmana et al, 2020; Schultz et al, 2013). Thus, it is CEO pay that causes and explains firm performance.…”

Section: Introductionmentioning

confidence: 99%

Do the same executive compensation strategies and policies fit all the firms in the banking industry? New empirical insights from the CEO pay–firm performance causal nexus

Olaniyi

2023

Manage Decis Econ

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This study introduces the roles of firms' intertwining and policy variations across firms in the CEO pay–bank performance causal relationships in Nigeria, using the Dumitrescu–Hurlin panel Granger non‐causality test and second‐generation estimators. The findings reveal that banks' interdependence, diverse strategies, and policies vary across banks. In 11 banks, CEO pay is not a reward for bank performance or an incentive to perform. Meanwhile, two banks utilize performance‐based pay for their CEOs, while the remaining two adopt CEO pay as a performance motivator. The study concludes that firms' interdependence and policy variations across firms influence the CEO pay–bank performance nexus.

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Market Competition, Managerial Incentives and Agency Cost

Cited by 5 publications

References 56 publications

Does Market Competition Motivate Corporate Social Responsibility? Insight from Malaysia

Does Market Competition Motivate Corporate Social Responsibility? Insight from Malaysia

Examining the Impact of Agency Issues on Corporate Performance: A Bibliometric Analysis

Do the same executive compensation strategies and policies fit all the firms in the banking industry? New empirical insights from the CEO pay–firm performance causal nexus

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