the more recent literature on corruption as a principal-agent problem whose significance for development depends on its dimensions related to the nature of the corrupt transaction itself‚ such as distinctions based on the agents involved‚ scale‚ type of deal‚ predictability‚ industrial organisation‚ etc.‚ all of which affect for better or worse the nature of the relationship between principal (as represented by the public interest) and the agent (politicians and bureaucrats). From this viewpoint
Premium Political corruption Bureaucracy Politics
satisfyingly way by Ronald Harry Coase in his 1937 published paper "The Nature of the Firm". He was given the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel for this pioneering work in 1991. II.1 Transaction Costs As economic theory suggests‚ outside the firm the price movement directs production‚ which is therefore coordinated through a series of exchange transactions on the market. Inside the firm this market transactions are eliminated and substituted through the entrepreneur
Premium Governance Stock market Principal-agent problem
proposes a methodology for governing expatriate assignments in the context of corporate-level objectives. Design/methodology/approach – The approach taken is to envisage expatriate managerial assignments within the theoretical framework of agency theory and the knowledge-based view of the firm. The paper begins with the view that knowledge acquisition and integration is a primary goal for most expatriate assignments. The relationship between expatriate managers and multinational corporation (MNC)
Premium Knowledge management Strategic management Information asymmetry
Theory of the Firm: Managerial Behavior‚ Agency Costs and Ownership Structure By: Michael Jenson and William Meckling Introduction and Summary 1. Motivation a. Draw on property rights‚ agency and finance to develop ownership structure theory 2. Theory of the Firm: An Empty Box a. Meet inputs and outputs to maximize profits 3. Property Rights a. Means “human rights” in this paper b. Affected by contracts i. Behavior of managers effected 4. Agency Costs a. Sum of i. Monitoring expenditures
Free Economics Property Cost
corporations. As a consequence‚ agency problems or principal-agent conflicts exist in the firm. Agency theory deals with such problem. Agency theory is concerned with how these agency problems affect the form of the contract and how they can be minimized‚ in particular‚ when contracting parties are variously informed (or uncertain). Agency problem A problem arising from a conflict of interest between principals such as investors and agents acting for them‚ such as brokers or managers. Agency
Premium Stock Stock market Board of directors
GE273 Week 5 Good Provision and Agents Task 1: Consider the following list of goods. For each good‚ explain the following point List of Goods: A cup of coffee at a coffee shop‚ Public Good‚ the private market should provide this good B City fire protection‚ Public Good‚ government should provide this good C Polar bears in the Arctic‚ Common Resource‚ this characteristics of the good would make it difficult to be provided by the private market or the government D Clean air‚ Common
Premium Stock market Chief executive officer Executive officer
Design and Justify an Optimal Compensation Scheme to Reward Bank CEO’s (2500words) i) Study the principal-agent theory to explain the key requirements that an optimal pay-contract should possibly meet and ii) Apply this to the financial sector in order to come up with an efficient compensation contract for bank CEO’s. Introduction The 2008 collapse of Lehman Brothers precipitated the sub-prime crisis‚ the collapse of major banks and a global economic crisis that resulted in a worldwide recession
Premium Stock Stock market Bank
Access to HE Diploma: BTEC Higher Nationals from 2010 – XXXX | Unit title(s): Unit 2. Managing Financial Resources and Decisions | Unit code(s): H/601/0548 | Learner: | Assessor: | Internal Verifier: | Title of Assignment: Principal-Agent problemRelated learning outcomes: 1 Understand the sources of finance available to a business | Assignment Number:__1__ of __8__for this Unit | Date set: Feb 26‚ 2013 | | Date for final submission: Mar. 5‚ 2013 | Learner declaration:
Premium Dow Jones Industrial Average Educational psychology Financial statements
comment‚ this essay will focus on how theories of regulation apply to accounting practices and the necessity of accounting regulation. First of all‚ according to Oxford Dictionaries‚ accounting means ‘the process or work of keeping financial accounts’. While regulation is ‘a rule or directive made and maintained by an authority’. (Oxford Dictionaries 2013) Since long ago the necessity of accounting regulation has been keep questioning. Efficient markets theory claim that accounting regulation is
Premium Principal-agent problem Regulation Information asymmetry
stockholders and management is called an agency relationship. Such a relationship exists whenever someone (the principal) hires another (the agent) to represent his/her interests. For example‚ you might hire someone (an agent) to sell a car that you own while you are away at school. In all such relationships‚ there is a possibility of a conflict of interest between the principal and the agent. Such a conflict is called an agency problem. Suppose you hire someone to sell your car and you agree to pay
Premium Management Principal-agent problem Goal