Testing agency theory with entrepreneur effort and wealth

• 成果类型: Article
• 署名作者: Bitler, MP; Moskowitz, TJ; Vissing-Jorgensen, A
• 署名单位: RAND Corporation; University of Chicago; National Bureau of Economic Research; Northwestern University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2005.00739.x
• 发表日期: 2005
• 页码: 539-576
• 关键词: MARKET VALUATION; trade-off; OWNERSHIP; COMPENSATION; linearity; COSTS; RISK

摘要

We develop a principal-agent model in an entrepreneurial setting and test the model's predictions using unique data on entrepreneurial effort and wealth in privately held firms. Accounting for unobserved firm heterogeneity using instrumental-variables techniques, we find that entrepreneurial ownership shares increase with outside wealth and decrease with firm risk; effort increases with ownership; and effort increases firm performance. The magnitude of the effects in the cross-section of firms suggests that agency costs may help explain why entrepreneurs concentrate large fractions of their wealth in firm equity.