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An agency theory approach on Romanian listed companies’ capital structure

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  • Liviu-Adrian ȚAGA

    (Bucharest Academy of Economic Studies, Romania)

Abstract

Capital structure is one of the most studied thematics in corporate finance because of its strong dependencies with companies’ performance. Literature provides various theories trying to explain capital structure and financing decisions. Agency theory treats the subject from a principal-agent approach. Diverging interests of these two decisional factors can explain the financing decisions taken by companies where other capital structure’s theories fail. Testing agency theory implications against a sample of Romanian listed companies will show whether this theoretical concept provides empirical results in an emerging market with developing capital market.

Suggested Citation

  • Liviu-Adrian ȚAGA, 2017. "An agency theory approach on Romanian listed companies’ capital structure," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(612), A), pages 39-50, Autumn.
    • Handle: RePEc:agr:journl:v:3(612):y:2017:i:3(612):p:39-50
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    References listed on IDEAS

    as
    1. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    2. Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-1177, December.
    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    4. James S. Ang & Rebel A. Cole & James Wuh Lin, 2000. "Agency Costs and Ownership Structure," Journal of Finance, American Finance Association, vol. 55(1), pages 81-106, February.
    5. Lambert, Richard A., 2001. "Contracting theory and accounting," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 3-87, December.
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