Study On Executives' Demographic Heterogenicity,Ownership And Agency Cost

The important characteristic of modern corporate system is the separation of ownership and management rights,subsequently the principal-agent relationship between the owner and the manager leads to agency costs.Therefore,some scholars believe that agency cost is the inevitable result of the evolution of enterprise system.Considerable studies show that agency costs are influenced by the company's internal governance structure and external environment.But soft factors have not received enough attention.According to the Upper Echelons Theory,the characteristics of senior executives,such as age,educational background,career path,and their heterogeneity affect corporate behavior.Also,the principal-agent behavior is no exception(Hambrick &Mason,1984).With the intersection and integration of disciplines,the cultural and social factors behind the individual characteristics of senior executives have attracted more and more attention in the field of corporate governance.Inspired by this,this paper tries to excavate the deep meaning behind executives' heterogeneity and discuss the influence on the agency cost.Research conclusions are as follows.First,in terms of age difference,the older the chairman is,the lower the agent cost of the company is.There is non-linear negative correlation between the inter-generational difference of the chairman and the general manager and the agent cost of the company.In addition,inter-generational differences are more significant in reducing agency costs in the state-owned enterprises.Second,when it comes to gender difference,a company at the helm of chairman and CEO of the same gender has lower agency costs and high level of corporate governance.The conclusion differs in companies with different property rights.Last,in the context of educational background,the more educated a chairman is than a CEO,the lower the agency cost is.The innovation of this paper lies in the following facets:(1)there is little research on soft factors in the field of corporate governance,and this paper supplements the research on soft factors of corporate governance.This paper analyzes the role of individual characteristic heterogeneity in the principal-agent relationship and breaks through the stereotype of corporate governance based on the rigid rules at the institutional level in thepast.(2)this paper puts forward the viewpoint that individual characteristic difference can restrain agency cost from the perspective of intergenerational and social norm.Based on sociological theory,this paper studies the heterogeneity of corporate executives across disciplines,and finds that under the intergenerational perspective,senior executives' age differences can effectively restrain agency costs and under the influence of social norms.The difference of the education level of the senior executives can alleviate the agency cost to a certain extent.