Agency Cost & Corporate Governance
Agency Costs and Corporate Governance
I Introduction
Before analysing problems that occur when institutional ownership and control are separated, it should be outlined why institutions exist at all. Therefore, chapter two examines why organizations occur in economy. Chapter three addresses the agency problem, based on this organization. Chapter four addresses the common ways to solve the agency problem and chapter five gives a comparison over the three most important corporate governance systems, namely the US, the German and the Japanese one.
II "Why is there any Organization?"
The basic question that has to be addressed is: "Why is there any organization?" This question was first addressed in a 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......
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Approximate Word Count: 6512
Approximate Pages: 27 (250 words per double-spaced page)
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