Corporate governance structure and product market competition

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This article assesses the effects of the competitive structure of a product market on a firm's corporate governance structure. Our model demonstrates that shareholders strategically determine the corporate governance structure, including the manager's stock ownership and his controlling power over the firm, in order to maximize their utility in the product market competition. We find that the manager's stock ownership is lower and his controlling power over the firm is higher when the firm's product is more profitable or when competition within the product market is more severe. The inefficiency of the wealth transfer from shareholders to the manager also affects the corporate governance structure.
Publisher
ROUTLEDGE JOURNALS
Issue Date
2016
Language
English
Article Type
Article
Keywords

ASIAN FINANCIAL CRISIS; AGENCY COSTS; OWNERSHIP STRUCTURE; CAPITAL STRUCTURE; EQUITY PRICES; OLIGOPOLY; FIRM; COMPENSATION; BEHAVIOR

Citation

APPLIED ECONOMICS, v.48, no.14, pp.1281 - 1292

ISSN
0003-6846
DOI
10.1080/00036846.2015.1096009
URI
http://hdl.handle.net/10203/207786
Appears in Collection
MT-Journal Papers(저널논문)
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