Security Analysis, Agency Costs, and Company Characteristics

• DOI: 10.2469/faj.v56.n6.2403
• Publication Date: 2006-02-27T08:02:07Z
• Authors: John A. Doukas; Chansog Kim; Christos Pantzalis
• Keywords: Agency cost; Security Analysis; Shareholder Value

We appraise the monitoring activity of security analysis from perspective manager–shareholder conflict. Using a data set more than 7,000 company-year observations for manufacturing companies tracked by analysts over 1988–94 period, we found that acts as monitor to reduce agency costs associated with separation ownership and control. also found, however, are effective in reducing managerial non-value-maximizing behavior single-segment multisegment companies. In addition, shareholder gains larger