Agency Costs and Ownership Structure in New Zealand Unlisted Small Businesses

28 Pages Posted: 18 Nov 2018

See all articles by Nirosha Hewa Wellalage

Nirosha Hewa Wellalage

The University of Waikato

Stuart Locke

University of Waikato - Management School

Date Written: 2010

Abstract

This paper discusses a small business based investigation of principal-agent and principal-principal dimensions of agency cost. Panel data for 11 years to 2008, covering a sample of small businesses not listed on a stock exchange, are examined using multivariate statistical techniques. The sample of businesses includes sole proprietorships, partnerships and private companies and differs from previous studies in terms of selection bias and breadth of coverage. Several variables, including financial and operating structure, size, industry, performance and ownership concentration are found to be related to the level of agency costs. Aspects of agency cost have been researched for small and large listed companies but unlisted small businesses, many of which are unincorporated trading as sole proprietorships and partnerships, have not previously been the subject of robust empirical research. This paper makes a number of contributions to the agency cost debate, using a New Zealand data set for unlisted small businesses.

Suggested Citation

Hewa Wellalage, Nirosha and Locke, Stuart, Agency Costs and Ownership Structure in New Zealand Unlisted Small Businesses (2010). Available at SSRN: https://ssrn.com/abstract=3283515 or http://dx.doi.org/10.2139/ssrn.3283515

Nirosha Hewa Wellalage (Contact Author)

The University of Waikato ( email )

Stuart Locke

University of Waikato - Management School ( email )

Hamilton
New Zealand

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