Journal ArticleDOI
Agency Problems and Residual Claims
Eugene F. Fama,Michael C. Jensen +1 more
TLDR
Jensen and Fama as mentioned in this paper developed a set of propositions that explaim the special features of the residual claims of different organizational forms as efficient approaches to controlling agency problems and explained the survival of organizational forms in specific activities.Abstract:
Social and economic activities, like religion, entertainment, education, research, and the production of other goods and services, are carried on by different types of organizations, for example, corporations, proprietorships, partnerships, mutuals and nonprofits. There is competition among organizational forms for survival. The form of organization that survives in an activity is the one that delivers the product demanded by customers at the lowest price while covering costs. The characteristics of residual claims are important both in distinguishing organizations from one another and in explaining the survival of organizational forms in specific activities. This paper develops a set of propositions that explaim the special features of the residual claims of different organizational forms as efficient approaches to controlling agency problems. © M. C. Jensen and E. F. Fama, 1983 Michael C. Jensen, Foundations of Organizational Strategy Chapter 6, Harvard University Press, 1998. Journal of Law & Economics, Vol XXVI (June 1983) This document is available on the Social Science Research Network (SSRN) Electronic Library at: http://papers.ssrn.com/sol3/paper.taf?ABSTRACT_ID=94032 AGENCY PROBLEMS AND RESIDUAL CLAIMSread more
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Journal ArticleDOI
Separation of ownership and control
Eugene F. Fama,Michael C. Jensen +1 more
TL;DR: The authors argue that the separation of decision and risk-bearing functions observed in large corporations is common to other organizations such as large professional partnerships, financial mutuals, and nonprofits. But they do not consider the role of decision agents in these organizations.
Journal ArticleDOI
A Survey of Corporate Governance
Andrei Shleifer,Robert W. Vishny +1 more
TL;DR: Corporate Governance as mentioned in this paper surveys research on corporate governance, with special attention to the importance of legal protection of investors and of ownership concentration in corporate governance systems around the world, and shows that most advanced market economies have solved the problem of corporate governance at least reasonably well, in that they have assured the flows of enormous amounts of capital to firms, and actual repatriation of profits to the providers of finance.
Journal ArticleDOI
Strategic assets and organizational rent
TL;DR: In this article, the authors focus on the linkages between the industry analysis framework, the resource-based view of the firm, behavioral decision biases and organizational implementation issues, and connect the concept of Strategic Industry Factors at the market level with the notion of Strategic Assets at the firm level.
Journal ArticleDOI
The Structure of Corporate Ownership: Causes and Consequences
Harold Demsetz,Kenneth Lehn +1 more
TL;DR: In this paper, the authors argue that the structure of corporate ownership varies systematically in ways that are consistent with value maximization, and they find no significant relationship between ownership concentration and accounting profit rates for a set of firms.
Journal ArticleDOI
The market for corporate control: The scientific evidence☆
TL;DR: A review of the scientific literature on the market for corporate control can be found in this paper, where the authors argue that corporate control is best viewed as an arena in which managerial teams compete for the rights to manage corporate resources.
References
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Journal ArticleDOI
Auditor size and audit quality
TL;DR: In this paper, the authors argue that audit quality is not independent of audit firm size, even when auditors initially possess identical technological capabilities, and when incumbent auditors earn client-specific quasi-rents, auditors with a greater number of clients have more to lose by failing to report a discovered breach in a particular client's records.
Book ChapterDOI
On the Corporate Demand for Insurance
David Mayers,Clifford W. Smith +1 more
TL;DR: The Insurance Information Institute reported that business insurance accounted for approximately 54.2 percent of the $79, 032,923,000 in direct property and liability insurance premiums written in the United States in 1978 as mentioned in this paper.
Journal ArticleDOI
Contractual Provisions, Organizational Structure, and Conflict Control in Insurance Markets
David Mayers,Clifford W. Smith +1 more
TL;DR: In this article, the authors provide a foundation for a positive theory of insurance contracting with examples of its testable predictions and argue that incentive conflicts arise when discretionary action is authorized and that contractual provisions and organizational structures control sources of conflict within the insurance market.