Does altruism reduce agent cost?——Ａ Study based on Altruism in Family Business
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| Title | Does altruism reduce agent cost?——Ａ Study based on Altruism in Family Business
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| Author | Wang Minglin, Xu mengna and Wang Hesen |
| Organization | Hangzhou Normal University; School of economics and management; Hangzhou Electric Technology University; School of management |
| Email | minglinw@163.com；xumena@163.com；hesenwang@126.com |
| Key Words | Altruism; Hamilton relation coefficient; Differential sequence; Agency cost |
| Abstract | The biggest characteristic of the principal-agent relationship between owners and managers in family business is the embedded altruism. In this paper, we measure the level and structure of Altruism through improving Hamilton genetic coefficient of biological evolution and introducing the concept of “the differential sequence” in the local social science, and investigate the influence of altruism on agency cost by using panel data from 2004 to 2010 consisting of 362 family listing enterprises. We find that: 1) The level and structure of altruisms both lower agency cost, and there is a substitution effect between them. 2) The influence of Altruism on agency cost changes along with changes of the internal organizational environment. When an enterprise develops to a certain stage, the positive effects gradually decrease and the negative effects gradually increase. 3) The influence of Altruism on agency cost also changes along with changes of the external institutional environment. The support from a good external environment is essential for the positive effects on agency cost. This paper extends the research on agency problem of family business from both aspects of basic theory and measurement technology. The conclusion has important theoretical and policy implications for evaluation and perfection of governance structure of the current family listing enterprises. |
| Serial Number | WP509 |
| Time | 2013-10-15 |
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