Types I, II, III Agency Problems, Firm Value, and National Governance Quality A Case Study of Indonesian and Singaporean Companies

DOI

10.2991/978-94-6463-008-4_19How to use a DOI?

Keywords

Agency problem; National governance quality; Firm value

Abstract

Corporate governance is mostly studied in developed countries such as the US, UK, and some developed countries in Europe, which focuses on Type I agency problems (shareholder-manager), and there is a dearth of types of agency problems such as type II problems (shareholder-shareholder) and type III problems (shareholder-creditor). Furthermore, the modern financial literature has turned to national governance quality in influencing firm value. So, this research is interested in exploring agency problems I, II, and III affecting firm value with national governance quality as a moderating variable. The research sample was manufacturing companies listed on the Indonesia Stock Exchange and Singapore Exchange from 2016–2020. The findings show that type I agency problem has a significant negative effect and Types I and II agency problem have an insignificant negative effect on firm value in Indonesia. While Types I and II agency problem have a significant negative effect. Still, Type III agency problem has an insignificant negative effect on firm value in Singapore. Moreover, national governance weakens the negative influence of the Type II agency problem on firm value in Singaporean manufacturing companies. Generally, types I, II, and III agency problems give rise to different agency cost levels in companies of a country, so the government needs to reform national governance quality to increase firm value.

Copyright

© 2023 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Septiana Sihombing
AU  - Isfenti Sadalia
AU  - Amlys Syahputra Silalahi
PY  - 2022
DA  - 2022/12/05
TI  - Types I, II, III Agency Problems, Firm Value, and National Governance Quality A Case Study of Indonesian and Singaporean Companies
BT  - Proceedings of the 19th International Symposium on Management (INSYMA 2022)
PB  - Atlantis Press
SP  - 141
EP  - 150
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-008-4_19
DO  - 10.2991/978-94-6463-008-4_19
ID  - Sihombing2022
ER  -