Corporate governance and transaction cost economics: A study of the equity governance structure

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dc.contributor.authorSaravia, Jimmy A.
dc.contributor.authorSaravia, Silvia
dc.contributor.eafitauthorjsaravia@eafit.edu.co
dc.contributor.eafitauthorSilvia.SARAVIA@cepal.org
dc.coverage.spatialMedellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degreeseng
dc.date.accessioned2014-05-29T19:18:15Z
dc.date.available2014-05-29T19:18:15Z
dc.date.issued2014-05-12
dc.description.abstractThis paper examines the Transaction Cost Economics (TCE) theory of capital structure and finds that for the case of equity the usual TCE logic is not fully worked out. In particular, an analysis of the key issue of bilateral dependency between the firm and its shareholders is absent. To fill this gap in the literature, the paper further develops the theory of the equity governance structure by taking account of the concept of bilateral dependency over the lifecycle of the firm. The paper finds that, both theoretically and empirically, contractual hazards are indeed mitigated for the case of fast growing young firms which are dependent on shareholders to finance future growth. In contrast, for the case of mature firms, which in virtue of their large free cash flows are independent from shareholders, contractual safeguards are altered to the disadvantage of shareholders and consequently managerial discretion costs increase.eng
dc.identifier.jelD23
dc.identifier.jelG31
dc.identifier.jelG32
dc.identifier.jelG34
dc.identifier.urihttp://hdl.handle.net/10784/2429
dc.language.isoengeng
dc.publisherUniversidad EAFITspa
dc.publisher.departmentEscuela de Economía y Finanzasspa
dc.rights.accessrightsinfo:eu-repo/semantics/openAccesseng
dc.rights.localAcceso abiertospa
dc.subject.keywordCorporate Governanceeng
dc.subject.keywordTransaction Cost Economicseng
dc.subject.keywordFree Cash flowseng
dc.subject.keywordFirm Valuationeng
dc.titleCorporate governance and transaction cost economics: A study of the equity governance structureeng
dc.typeworkingPapereng
dc.typeinfo:eu-repo/semantics/workingPapereng
dc.type.hasVersiondrafteng
dc.type.localDocumento de trabajo de investigaciónspa

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