This paper examines the impact of internal corporate governance on agency costs for French firms from 2000 to 2015. Our results reveal that shareholders themselves are not a homogenous group since they have no single common investment horizon. We found that managerial ownership is more effective in mitigating operational expenses. However, they take advantage of excessive spending on indirect benefits. We show that board of directors does not serve as a significant deterrent to excessive discretionary expenses. Finally, we found that dividend policy is a useful tool to reduce agency conflicts by reducing cash that is available for discretionary uses.

The aim of this paper is to examine the impact of foreign ownership on the profitability of Tunisian financial institutions. Empirical evidence shows (i) that the foreign ownership has a positive and significant effect on firm profitability as measured by return on assets and return on equity. (ii) The presence of foreign directors in the board causes also an increase in return on assets. (iii) However, contrary to previous studies, state-owned firms seem to perform better than fully privatized companies.

This paper demonstrates whether the impact of agency costs on firm value depends on the level of managerial power using the fraction of capital held by the manager, as well as their level of voting rights. Focusing on a sample of 120 non-financial French firms incorporated in the CAC All-Tradable Index for the period 2008–2022, the first empirical analysis provides strong evidence that agency costs of equity, as measured in terms of operating expenses, administrative expenses and the agency cost of free cash flow, exert a negative impact on the firm’s market value. In a second empirical analysis, we split our sample into three sub-samples with the aim of capturing the effect of managerial power. The findings lead us to believe that the association between the agency cost measurement and the firm’s market value depend on the level of managerial power. This paper challenges prior studies by strengthening our understanding of managerial behavior (incentive, neutral, and entrenchment) in relation to shareholder wealth. Furthermore, it contributes to the recent literature by enabling a better knowledge of the disparity related to studies conducted in other countries with different governance models.

This paper investigates the impact of debt financing on dividend payments when they face the agency costs of free cash flow. It focuses on a sample of 120 firms listed on the Saudi Stock Exchange during the period of 2011–2021. The findings from the Generalized Least Squares regression model revealed that the presence of agency costs of free cash flows may limit the funds available for dividend payments. Regarding the moderating effect of debt structure, the research highlights the significant role of long-term debt in making more prudent use of free cash flow. The use of long-term debt becomes more effective and can enhance shareholder wealth when a firm is facing agency costs of free cash flow. More specifically, bondholders primarily focus on affirmative covenants which require the firm to undertake specified actions such as maintaining assets and financial ratios, or paying taxes, but they do not restrict financing activities such as dividend payments. Since interest and debt repayments are fixed obligations, using free cash flow for dividend disbursement is considered a more profitable and beneficial approach for shareholders in the context of Saudi Arabia. This study contributes to our understanding of financial management under different debt structures and improves our scientific knowledge of the culture of Saudi firms regarding the dividend distribution policy.