Mitigating Agency Conflict: A Systematic Review of Literature on Governance Mechanisms
International Journal of Accounting, Finance and Risk Management
Volume 2, Issue 1, February 2017, Pages: 39-44
Received: Nov. 29, 2016; Accepted: Feb. 13, 2017; Published: Mar. 2, 2017
Views 1623      Downloads 96
Agyemang Badu Ebenezer, Department of Business Administration, School of Business and Economics, Presbyterian University College, Abetifi, Ghana
Article Tools
Follow on us
The concern of this paper is to systematically review prior literature and to contribute significantly to the understanding of governance mechanisms in resolving agency conflict between shareholders and managers. Using systematic literature approach, this study presents 123 articles published within 1978-2014 in scholarly articles. The review modified the procedure adopted by [1] and [19]. The results observe that significant body of knowledge on mechanisms to resolve agency conflict exists from different theoretical perspectives. However, combinations of mechanisms and circumstances under which they become effective are yet to be thoroughly explored. This paper attempts to fully understand systematically the effectiveness of governance mechanisms from different theoretical perspectives geared towards resolving agency conflict.
Systematic Literature, Positivist Stream, Principal Agent Stream, Internal Mechanism, External Mechanism
To cite this article
Agyemang Badu Ebenezer, Mitigating Agency Conflict: A Systematic Review of Literature on Governance Mechanisms, International Journal of Accounting, Finance and Risk Management. Vol. 2, No. 1, 2017, pp. 39-44. doi: 10.11648/j.ijafrm.20170201.16
Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Altman, E. I. and Eisenbeis, R. A. (1978), “Financial applications of discriminant analysis: a clarification”, Journal of Financial & Quantitative Analysis, Vol. 13 No. 1, pp. 185-195.
Amihud, Y. and Lev, B., 1981. Risk reduction as a managerial motive for conglomerate mergers. The bell journal of economics,, pp. 605-617.
Ang, J. S., R. A. Cole and J. W. Lin (2000), “Agency costs and ownership structure”, Journal of Finance 55, 81-106.
Aziz, M. A Dar, H. A. (2006), “Predicting corporate bankruptcy: where we stand?”, Corporate Governance, Vol. 6 No. 1, pp. 18-3.
Balcaen, S. and Ooghe, H. (2006),“35 years of studies on business failure: an overview of the classic statistical methodologies and their related problems”, The British Accounting Review, Vol. 38 No. 1, pp. 63-93.
Berle, A. A., and Means, G. C. 1932. The modern corporation private property. Transaction Pub.
Biolchini, J., Main, G. P., Natali, A. C. C. and Travassos, G. H. (2005), “Systematicreviewinsoftware engineering”, TR-ES 670/05, System Engineering and Computer Science Rio De Janeiro, Department.
Chen, G., Kirkman, B. L., Kanfer, R., Allen, D., and Rosen, B. (2007). A multilevel study of leadership, empowerment, and performance in teams. Journal of Applied Psychology, 92, 331-346.
Cumming, D. (2008). Contracts and exits in venture capital finance. Review of Financial Studies 21 (5), 1947-1982.
Dalton, D. R., & Dalton, C. M. (2011). Integration of micro and macro studies in governance research: CEO duality, board composition, and financial performance. Journal of Management, 37 (2), 404-411.
Dey, A. (2008). Corporate governance and agency conflicts. Journal of Accounting Research, 46 (5), 1143-1181.
Dimitras, A. I., Zanakis, S. H. and Zopounidis, C. (1996), “A survey of business failures with an emphasis on prediction methods and industrial applications”, European Journal of Operational Research, Vol. 90 No. 3, pp. 487-513.
Edmister, R. O. (1972), Financial Ratios as Discriminant Predictors of Small Business Failure, Wiley-Blackwell.
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of management review, 14 (4), 532-550.
Fama, E. F. (1980). Agency Problems and the Theory of the Firm. The journal of political economy, 288-307.
Richard H. Fosberg, (2004),"Agency problems and debt financing: leadership structure effects", Corporate Governance: The international journal of business in society, Vol. 4 Iss 1 pp. 31–38.
Hermalin, B. E., Weisbach, M. S., 1991. The effects of board composition and direct incentives on firm performance. Financial Management 20, 101–112.
Jensen, M. C. 1993. The modern industrial revolution, exit, the failure of internal control systems. The Journal of Finance, 48 (3), 831-880.
Jones, F. L. 1987. Current techniques in bankruptcy prediction. Journal of accounting Literature, 6 (1), 131-64.
LA Porta, R., Lopez-De-Silense, F., Shleifer, A., and Vishany, R., 2000. Investor protection corporate governance. Journal of financial economics, 58 (1), 3-27.
Mensah, Y. M. (1983), “The differential bankruptcy predictive ability of specific price level adjustments: some empirical evidence”, Journal of Accounting Review, Vol. 58 No. 2, pp. 228-246.
Mensah, Y. M. (1984), “An examination of the stationarity of multivariate bankruptcy prediction models: a methodological study”, Journal ofAccountingResearch, Vol. 22 No. 1, pp. 380-395.
Mazlina Mustapha Ayoib Che Ahmad, (2011), "Agency theory and managerial ownership: evidence from Malaysia", Managerial Auditing Journal, Vol. 26 Iss 5 pp. 419–436.
Nicolas, J. and Toval, A. (2009), “On the generation of requirements specifications from software engineering models engineering models: a systematic literature review”, Information and Software Technology, Vol. 51 No. 9, pp. 1291-1307.
Ooghe, H. and Balcaen, S.(2002),“A re failure prediction models transferable from one country to another? An empirical study using Belgian financial statements”, Proceedings of the 9th Annual Conference of the Multinational Finance Society, Cyprus, 30 June-3 July.
Ooghe, H., Joos, P. Bourdeaudhuij, C. (1995), “Financial distress models in Belgium: theresults of a decade of empirical research”, International Journal of Accounting, Vol. 30 No. 3, pp.245-274.
Piot, C.(2001) Agency Costs and Audit Quality: Evidence from France. European Accounting Review, Vol. 10, No. 3, 2001. Available at SSRN:
Ravi, P. and Ravi, K. V. (2007), “Bankruptcy prediction in banks and firms via statistical and intelligent techniques- review”, European Journal of Operational Research, Vol.180No.1, pp. 1-28.
Singh, V. 2007. Ethnic diversity on top corporate boards: A resource dependency perspective. International Journal of Human Resource Management, 18: 2128-2146.
Sheifer, A., and Vishny, R. (1997). A survey of corporate governance. Journal of Finance, 52, 737-783.
Sun, J., Cahan, S. F., & Emanuel, D. 2009. Compensation committee governance quality, chief executive officer stock option grants, and future firm performance. Journal of Banking & Finance, 33: 1507-1519.
Mine Ugurlu, (2000),"Agency costs and corporate control devices in the Turkish manufacturing industry", Journal of Economic Studies, Vol. 27 Iss 6 pp. 566–599.
Walker, J. S., & Vasconcellos, G. M. (1997). A Financial-agency Analysis of Privatization: Managerial Incentives and Financial Contracting, Lehigh University Press.
Wei, Z., F. Xie, and Zhang, S. (2005) “Ownership Structure and Firm Value in China’s Privatized Firms: 1991-2001”, Journal of Financial and Quantitative Analysis, 40, 87-108.
Zmijewski, M. E. (1984), “Methodological issues related to the estimation of financial distress prediction models”, Journal of Accounting Research, Vol. 22, pp. 59-82.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186