Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure

ArXiv ID: ssrn-94043 “View on arXiv”

Authors: Unknown

Abstract

Click link for full abstract.

Keywords: Unknown

Complexity vs Empirical Score

• Math Complexity: 4.0/10
• Empirical Rigor: 1.0/10
• Quadrant: Philosophers
• Why: The paper is a highly influential theoretical work from financial economics that develops a conceptual framework using algebraic/verbal models rather than dense mathematics or empirical testing. It lacks data, backtesting, or implementation details, focusing instead on theoretical propositions about agency costs and ownership structure.

  flowchart TD
    A["Research Goal<br>Analyze managerial behavior and<br>agency costs in corporate structure"] --> B["Methodology<br>Agency Theory & Mathematical Modeling"]
    B --> C{"Key Data Points<br>Corporate financial data,<br>ownership structures, compensation schemes"}
    C --> D["Computational Process<br>Derive Cost Functions &<br>Optimization Constraints"]
    D --> E["Key Findings/Outcomes<br>1. Conflict of interest costs<br>2. Incentive alignment mechanisms<br>3. Optimal ownership structure"]