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Board Monitoring Intensity and Firm Performance Nexus: The Moderating Effect of Agency Conflict

Received: 9 May 2017     Accepted: 2 June 2017     Published: 25 July 2017
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Abstract

The purpose of this paper is to investigate the impact of board monitoring intensity on firm performance and further investigate the moderating effect of agency conflict on the relationship between monitoring intensity and firm performance. This paper uses a panel data of 137 firms listed on stock exchanges in Ghana and Nigeria over a period of seven years. System generalized method of moments and other estimation techniques were adopted for the study. The paper compute agency score using principal factor analysis and examine the moderating effect on the relationship between board composition measures and firm performance. Our findings which are robust across a number of econometric models that deal with different kinds of endogeneities indicate a positive and statistically significant relationship between board monitoring intensity and firm performance. A further examination using the agency score computed from principal factor analysis of the four main agency proxies indicates that agency conflict moderate the relationship between monitoring intensity and firm performance.

Published in Journal of Public Policy and Administration (Volume 1, Issue 1)
DOI 10.11648/j.jppa.20170101.14
Page(s) 35-43
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Monitoring Intensity, Firm Performance, Agency Conflict, Agency Theory

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  • APA Style

    Agyemang Badu Ebenezer. (2017). Board Monitoring Intensity and Firm Performance Nexus: The Moderating Effect of Agency Conflict. Journal of Public Policy and Administration, 1(1), 35-43. https://doi.org/10.11648/j.jppa.20170101.14

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    ACS Style

    Agyemang Badu Ebenezer. Board Monitoring Intensity and Firm Performance Nexus: The Moderating Effect of Agency Conflict. J. Public Policy Adm. 2017, 1(1), 35-43. doi: 10.11648/j.jppa.20170101.14

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    AMA Style

    Agyemang Badu Ebenezer. Board Monitoring Intensity and Firm Performance Nexus: The Moderating Effect of Agency Conflict. J Public Policy Adm. 2017;1(1):35-43. doi: 10.11648/j.jppa.20170101.14

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  • @article{10.11648/j.jppa.20170101.14,
      author = {Agyemang Badu Ebenezer},
      title = {Board Monitoring Intensity and Firm Performance Nexus: The Moderating Effect of Agency Conflict},
      journal = {Journal of Public Policy and Administration},
      volume = {1},
      number = {1},
      pages = {35-43},
      doi = {10.11648/j.jppa.20170101.14},
      url = {https://doi.org/10.11648/j.jppa.20170101.14},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jppa.20170101.14},
      abstract = {The purpose of this paper is to investigate the impact of board monitoring intensity on firm performance and further investigate the moderating effect of agency conflict on the relationship between monitoring intensity and firm performance. This paper uses a panel data of 137 firms listed on stock exchanges in Ghana and Nigeria over a period of seven years. System generalized method of moments and other estimation techniques were adopted for the study. The paper compute agency score using principal factor analysis and examine the moderating effect on the relationship between board composition measures and firm performance. Our findings which are robust across a number of econometric models that deal with different kinds of endogeneities indicate a positive and statistically significant relationship between board monitoring intensity and firm performance. A further examination using the agency score computed from principal factor analysis of the four main agency proxies indicates that agency conflict moderate the relationship between monitoring intensity and firm performance.},
     year = {2017}
    }
    

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    T1  - Board Monitoring Intensity and Firm Performance Nexus: The Moderating Effect of Agency Conflict
    AU  - Agyemang Badu Ebenezer
    Y1  - 2017/07/25
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    T2  - Journal of Public Policy and Administration
    JF  - Journal of Public Policy and Administration
    JO  - Journal of Public Policy and Administration
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    PB  - Science Publishing Group
    SN  - 2640-2696
    UR  - https://doi.org/10.11648/j.jppa.20170101.14
    AB  - The purpose of this paper is to investigate the impact of board monitoring intensity on firm performance and further investigate the moderating effect of agency conflict on the relationship between monitoring intensity and firm performance. This paper uses a panel data of 137 firms listed on stock exchanges in Ghana and Nigeria over a period of seven years. System generalized method of moments and other estimation techniques were adopted for the study. The paper compute agency score using principal factor analysis and examine the moderating effect on the relationship between board composition measures and firm performance. Our findings which are robust across a number of econometric models that deal with different kinds of endogeneities indicate a positive and statistically significant relationship between board monitoring intensity and firm performance. A further examination using the agency score computed from principal factor analysis of the four main agency proxies indicates that agency conflict moderate the relationship between monitoring intensity and firm performance.
    VL  - 1
    IS  - 1
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Author Information
  • Department of Business Administration, School of Business and Economics, Presbyterian University College, Abetifi, Ghana

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