Agency Costs and Ownership Structure in New Zealand Unlisted Small Businesses
28 Pages Posted: 18 Nov 2018
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.
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