Corporate governance, financial management decisions and firm performance: Evidence from the maritime industry

The globalization of the world economy along with the increased competition and the rapid technological advancements in the freight transportation markets, affected the financing environment of the maritime industry, and led more companies to rely on capital markets to finance investment opportunities (Syriopoulos and Theotokas, 2007 and Grammenos and Papapostolou, 2012a). Capital markets, however, appreciate the quality of a corporate governance system because it moderates the extent of the agency problems. Agency problems, arise from either the separation of ownership and management (Jensen and Meckling, 1976) or from conflicts of interest between controlling and non-controlling shareholders (Bebchuk and Weisbach, 2010), and may probe self-interested managers (controlling shareholders) to act against the best interests of shareholders (non-controlling shareholders). Agency theory suggests that shareholders may alleviate agency problems by instilling corporate governance mechanisms (Jensen and Meckling, 1976). Research output on the impact of corporate governance on firm policies and performance has been extremely prolific in the general cross section of industrial firms (see, among others, Gompers et al., 2003, Giroud and Mueller, 2011 and Brown et al., 2011). Nonetheless, whether the presence of corporate governance mechanisms are effective in mitigating agency problems in very specialized sectors, such as the maritime industry, remains an open empirical research issue which the authors investigate in this study.

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  • English

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  • Accession Number: 01523379
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Mar 20 2014 2:00PM