Template-Type: ReDIF-Article 1.0
Author-Name: Yusnidah Ibrahim
Author-Workplace-Name: College of Business, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah
Author-Email: mohanuddin@gmail.com
Author-Name:  Md Mohan Uddin
Author-Workplace-Name: College of Business, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah
Author-Name: Kamarun Nisham Taufil Mohd 
Author-Workplace-Name: College of Business, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah
Author-Name: Mohd Sobri Minai
Author-Workplace-Name: College of Business, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah
Title: Agency Costs and the Long-Run Performance of Debt Issuers 
Abstract: This study focuses on an agency cost explanation of the long-run performance of debt issuers based on debt issuance data in Malaysia during the period from January 2001 to October 2009. L ong-run performance is measured by buy and hold abnormal return (BHAR), while growth opportunities (GO), managerial ownership (MO), ownership concentration (OC) and free cash flow (FCF) are adopted as proxies for agency costs. Using a linear regression method, this study finds that BHAR is positively influenced by GO and OC but negatively influenced by MO and FCF, which supports an agency cost explanation of capital structure. An improvement in the performance of debt issuers is found to be associated with the monitoring of debt by debt issuers. Debt issuers with more concentrated ownership and lower MO benefit from the issuance of debt through a reduction of agency costs.
Classification-JEL:
Keywords: capital structure, agency theory, ownership concentration, bonds, long-run Performance
Journal: Asian Academy of Management Journal of Accounting and Finance
Pages: 67-87
Volume: 9
Issue: 1
Year: 2013
File-URL:http://web.usm.my/journal/aamjaf/vol%209-1-2013/Art%204%20%2867-87%29.pdf
File-Format: Application/pdf
Handle: RePEc:usm:journl:aamjaf00901_67-87