Capital Structure, Agency Cost and Corporate Governance: Theoretical Linkages Under the Operational Framework of a Modern Company

14 Pages Posted: 4 Mar 2019

See all articles by Zacharias Bragoudakis

Zacharias Bragoudakis

Bank of Greece; National and Kapodistrian University of Athens, Department of Economics

Date Written: February 15, 2019

Abstract

The purpose of this paper is to explain the interaction mechanism between the capital structure of a modern company, the implying agency cost that is raised when the company is expanding and the corporate governance system that should be implemented in order to achieve a smoothness of the implied internal friction. The corporate governance experience support that there is a lack of a systemic management at those problems. The above corporate problems reduce the maximization of the company value. It is argued that the failure to maximize the value of the company can be attributed to the endogenous weakness of corporate interconnection. This paper analyses the theory of corporate interconnection between its agents (shareholders, executive managers and bondholders), contributes to a better understanding of those issues and addressing them though a systematical and analytical framework.

Keywords: Agency Cost, Capital Structure, Corporate Governance, Corporate Finance, Ownership Structure, Value of Firms

JEL Classification: G32, G34, G40

Suggested Citation

Bragoudakis, Zacharias, Capital Structure, Agency Cost and Corporate Governance: Theoretical Linkages Under the Operational Framework of a Modern Company (February 15, 2019). Available at SSRN: https://ssrn.com/abstract=3333796 or http://dx.doi.org/10.2139/ssrn.3333796

Zacharias Bragoudakis (Contact Author)

Bank of Greece ( email )

21 E. Venizelos Avenue
GR 102 50 Athens
Greece
+302103203605 (Phone)

National and Kapodistrian University of Athens, Department of Economics ( email )

Sofocleous 1
Athens, 105 59
Greece
+30 21 0368 9400 (Phone)

HOME PAGE: http://www.econ.uoa.gr/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
41
Abstract Views
898
PlumX Metrics