Abstract
ABSTRACT This paper examines the relationship between common stock and option holdings of managers and the choice of investment and financing decisions by firms. The authors find support for the hypothesis of a positive relationship between the security holdings of managers and the changes in firm variance and in financial leverage. This conclusion is based on samples of acquiring and divesting firms. The findings are consistent with the hypothesis that executive security holdings have a role in reducing agency problems.
Keywords
Leverage (statistics)IncentiveBusinessFinanceAgency costInvestment decisionsStock (firearms)Agency (philosophy)Variance (accounting)Principal–agent problemStock optionsAccountingEconomicsMicroeconomicsShareholderBehavioral economicsCorporate governance
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Publication Info
- Year
- 1987
- Type
- article
- Volume
- 42
- Issue
- 4
- Pages
- 823-837
- Citations
- 703
- Access
- Closed
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Cite This
Anup Agrawal,
Gershon Mandelker
(1987).
Managerial Incentives and Corporate Investment and Financing Decisions.
The Journal of Finance
, 42
(4)
, 823-837.
https://doi.org/10.1111/j.1540-6261.1987.tb03914.x
Identifiers
- DOI
- 10.1111/j.1540-6261.1987.tb03914.x