TITLE:
The Effect of Fund Shareholding on Agency Costs and Corporate Value
AUTHORS:
Menglou Zhang
KEYWORDS:
Fund’s Holding, Agency Costs, Cash Dividends, Corporate Value
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.10 No.11,
November
24,
2020
ABSTRACT: Whether funds can participate in corporate governance to reduce agency costs and enhance corporate value has always been a research hotspot in academia. This article uses all A-share listed companies held by funds from 2008 to 2018 to study the impact of fund holdings on agency costs and corporate value, and further discusses the regulatory effect of cash dividends on the relationship between fund holdings and agency costs and the intermediary effect of agency costs in the relationship between fund holdings and corporate value. The study found that: 1) The equity ownership by funds helps to suppress agency costs of listed companies, and cash dividends play a regulatory role; 2) The equity ownership by funds helps to increase the value of the enterprise, and agency costs play an intermediary role. Finally, it is proposed that the government should encourage the development of mutual funds and promote funds to participate in corporate governance; listed firms should establish the significance of cash dividends and pay attention to the role of cash dividends in corporate governance.