The impact of free cash flow, equity concentration and agency costs on firm’s profitability

Abstract

This paper examines how free cash flow and equity concentration are associated with agency costs, and how they influence the profitability of insurance firms listed on the Saudi Stock Market. The results indicate that equity concentration has no significant impact on agency costs, free cash flow has no significant impact on agency costs and agency costs have no significant impact on firm's profitability. The findings of this study do not show any evidence to support the agency theory among insurance firms listed on the Saudi Stock Market.

The Relationship Between Free Cash Flows, Agency Costs and Firm Performance: A Research on Bist Companies

“…Çalışma sonucunda, kaldıracın serbest nakit akışları üzerinde pozitif etkisi olduğunu tespit etmişlerdir. Nobanee ve Abraham (2017) ise Suudi menkul kıymetler borsasında işlem gören sigorta şirketleri üzerine yaptıkları analiz sonucunda temsil ve nakit akış teorisini destekleyici bulgular elde edememişlerdir. Mutende vd., (2017), çalışmalarında 2006-2015 döneminde Nairobi Menkul Kıymetler Borsası'nda işlem gören firmalar üzerinde serbest nakit akışları ile firma performansı arasındaki ilişkiyi panel veri analizi ile araştırmışlardır.…”

Pengaruh Struktur Aset dan Biaya Keagenan Terhadap Kebijakan Hutang Dimediasi dengan Profitabilitas

“…Dalam penelitian terdahulu menyatakan struktur aset berpengaruh positif terhadap profitabilitas (Rahmawati & Mahfudz, 2018). Pada penelitian terdahulu menyatakan biaya keagenan berpengaruh negatif terhadap profitabilitas (Nobanee & Abraham, 2017). H1: Struktur aset dan biaya keagenan menunjukkan terdapat pengaruh terhadap profitabilitas.…”

“…Perbedaan dalam kepentingan pemegang saham dan manajer bisa menyebabkan konflik oleh karena itu pihak pemegang saham harus mempunyai cara agar dapat memantau dan untuk meminimalisir perbedaan kepentingan tersebut yaitu dengan adanya biaya keagenan. Peneliti terdahulu menyatakan bahwa biaya keagenan berpengaruh negatif terhadap profitabilitas (Nobanee & Abraham, 2017). H3: Biaya keagenan berpengaruh negatif terhadap profitabilitas.…”

“…Dari hasil pada tabel 5, disimpulkan : H1: Struktur aset dan biaya keagenan secara bersamaan berpengaruh terhadap profitabilitas pada industri kebutuhan pokok dan pangan atau makanan dan minuman yang tercatat di BEI tahun 2015-2019. Hal tersebut mendukung kajian terdahulu yang menyebutkan bahwa struktur aset dan biaya keagenan memiliki pengaruh terhadap profitabilitas (Nobanee & Abraham, 2017;Rahmawati & Mahfudz, 2018). Laba yang tinggi dapat membuat para investor tertarik untuk menanamkan modalnya pada perusahaan yang akan dikelola oleh manajemen melalui pembayaran biaya keagenan, sehingga tidak terjadi masalah keagenan.…”

Debt Financing and Agency Cost on Profitability: Are Real Estate Firms’ Performance in India Getting Affected?

“…Nobanee and Abraham (2017) worked to find the impact of free cash flows and the concentration of equity on agency costing and tried to understand its impact on the firms’ performance. The study was carried out on different insurance firms listed in the Saudi Stock Exchange.…”