Investment, Dividends, Firm Performance and Managerial Incentives: Another Insight into the Role of Corporate Governance

摘要: We combine the incentive schemes offered to managers in practice into a single package and construct governance index analyze role of addressing agency costs free cash flow. Using US based data, we find empirical evidence that do not consume perks but make tradeoff when they allocate flows firm between investment dividends. In general, underinvest overpay dividends; an increase their would retract both dividends toward optimal levels; hence, performance improve. also is used as control mechanism rather than substitute for package. Principals employ slow down there high informational asymmetry manager investors, set these variables close levels otherwise. Moreover, firms use governance. Furthermore, monotone relations investment, on one hand, other hand.