Agency Conflicts Around the World

85 Pages Posted: 14 Jul 2015 Last revised: 22 Mar 2018

See all articles by Erwan Morellec

Erwan Morellec

Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute

Boris Nikolov

University of Lausanne; Swiss Finance Institute; European Corporate Governance Institute (ECGI)

Norman Schuerhoff

Swiss Finance Institute - HEC Lausanne

Multiple version iconThere are 2 versions of this paper

Date Written: May 9, 2017


We use a dynamic model of financing decisions to measure agency conflicts for a large panel of 12,652 firms from 14 countries. Our estimates show that agency conflicts are large and vary significantly across firms and countries. Differences in agency conflicts are largely due to differences in firm-level governance, ownership concentration, and other firm characteristics, including intangibles and cash. The origin of law is more relevant for curtailing governance excesses than for guarding the typical firm. Agency costs split about equally between wealth transfers and value losses from policy distortions, the latter being smaller in civil law countries where ownership is more concentrated.

Keywords: Capital Structure, Agency Conflicts, Corporate Governance, Structural Estimation

JEL Classification: G32, G34

Suggested Citation

Morellec, Erwan and Nikolov, Boris and Schuerhoff, Norman, Agency Conflicts Around the World (May 9, 2017). Swiss Finance Institute Research Paper No. 15-21, Available at SSRN: or

Erwan Morellec (Contact Author)

Ecole Polytechnique Fédérale de Lausanne ( email )

College of Management
Extranef Quartier UNIL-Dorigny
1015 Lausanne, CH-1015


Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4

Boris Nikolov

University of Lausanne ( email )

Lausanne, CH-1015

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Norman Schuerhoff

Swiss Finance Institute - HEC Lausanne ( email )


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