Firm Value and Its Size: A Model of Cooperation and Agency Costs

63 Pages Posted: 3 Aug 2012

See all articles by Julián Benavides Franco

Julián Benavides Franco

Universidad ICESI - Finance; Universidad ICESI - Economics & Management

Date Written: December 15, 2011

Abstract

An important variable absent in agency cost analyses is the extent of cooperation among the manager and the investors. Two types of cooperation are studied: 1.) generalized cooperation, a concept close to social capital; and 2.) discriminating cooperation, a concept close to cooperation with relatives. These types of cooperation affect managerial private benefits differently; while generalized cooperation reduces agency costs, discriminating cooperation may enlarge them, until the manager becomes highly close toward his cooperating investor.

Keywords: corporate governance, cooperation, altruism, firm performance

JEL Classification: G3, G32

Suggested Citation

Benavides Franco, Julián, Firm Value and Its Size: A Model of Cooperation and Agency Costs (December 15, 2011). Available at SSRN: https://ssrn.com/abstract=2122799 or http://dx.doi.org/10.2139/ssrn.2122799

Julián Benavides Franco (Contact Author)

Universidad ICESI - Finance ( email )

Calle 18 #122-135
A.A. 25608
A.A. 25608 Cali
Colombia

Universidad ICESI - Economics & Management ( email )

Cali
Colombia

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