Agency costs and the size discount: evidence from acquisitions

David Offenberg

Abstract


Many scholars have found a negative relationship between a firm's size and its value, as measured by Tobin's q. This result is called the size discount. There are hypotheses about why the size discount exists, but none have been rigorously empirically tested. This paper argues that the size discount is created by the inability of shareholders to minimize agency costs in larger companies. Statistical tests suggest that the size discount only appears in large firms with managers that impose excessive agency costs upon their shareholders. Empiricists who use Tobin's q to proxy for growth opportunities may need a different proxy.

Muchos académicos han encontrado una relación negativa entre el tamaño de la firma y su valor, calculada según el q de Tobin. El resultado se llama el descuento por tamaño. Existen múltiples hipótesis que tratan de explicar por qué el descuento por tamaño se produce, pero ninguna ha sido empíricamente examinada con rigurosidad. Este estudio argumenta que el descuento por tamaño se crea debido a la inhabilidad de los accionistas para minimizar los costos de agencia en las grandes empresas. Las pruebas estadísticas sugieren que el descuento por tamaño solo aparece en las empresas grandes con gerentes que imponen costos de agencia excesivos a los accionistas. Los empíricos que usan el q de Tobin para representar factores de oportunidades de crecimiento necesitarán un factor diferente.


Keywords


Agency costs; size discount; acquisitions; corporate governance; costos de agencia; descuento por tamaño; adquisiciones; gobierno corporativo

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