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dc.contributor.authorWood, Chrisen_NZ
dc.date.available2011-04-07T03:14:54Z
dc.date.copyright2005-02-08en_NZ
dc.identifier.citationWood, C. (2005, February 8). Agency costs and corporate governance: Evidence from proxy contests (Thesis). Retrieved from http://hdl.handle.net/10523/1361en
dc.identifier.urihttp://hdl.handle.net/10523/1361
dc.description.abstractThis thesis examines the impact of a proxy contest on the firm and the wealth of its shareholders. I find that proxy contests serve their intended purpose as an effective external disciplining mechanism, resulting in changes to the incumbent board and improvement in the firms performance. Pre-contest and contest period abnormal returns are similar across all firms subject to a proxy contest. Over the pre-contest period, target firms experience significantly negative stock price performance. The announcement and full contest periods result in a positive stock price reaction for all firms, suggesting that the market views the initiation of a proxy contest as good news. Agency theory suggests that a proxy contest should reduce the problems involved with a separation between principal and agent. To examine this relation, a subsample containing those firms with high free cash flow and low Tobin's Q is examined, Interesting differences in the stock price performance between firms in which dissidents 'win' seats and 'do not win' seats become apparent in the post-contest period. When dissidents 'win' seats, target firms stock prices experience a statistically significant wealth appreciation. Subsequent tests attribute such wealth gains to reduced agency problems through a reduction in capital expenditure and research and development expenditure. When dissidents 'do not win' seats, no attempt to reduce agency costs is apparent, and as a result, these firms experience a sustained wealth loss over the years surrounding a proxy contest. The steps taken to reduce agency costs in those firms in which dissidents 'win seats' suggests that proxy contests fulfil their intended role -- to discipline the board and to improve firm performance.en_NZ
dc.subjectproxy contesten_NZ
dc.subjectexternal disciplining mechanismen_NZ
dc.subjectfirms performanceen_NZ
dc.subjectstock price performanceen_NZ
dc.subjectdiscipline the boarden_NZ
dc.subject.lcshHF Commerceen_NZ
dc.subject.lcshHF5601 Accountingen_NZ
dc.subject.lcshHG Financeen_NZ
dc.titleAgency costs and corporate governance: Evidence from proxy contestsen_NZ
dc.typeThesisen_NZ
dc.description.versionUnpublisheden_NZ
otago.bitstream.pages11en_NZ
otago.date.accession2006-09-04en_NZ
otago.schoolFinance and Quantitative Analysisen_NZ
thesis.degree.disciplineFinance and Quantitative Analysisen_NZ
thesis.degree.grantorUniversity of Otagoen_NZ
thesis.degree.levelMasters Thesesen_NZ
otago.interloanyesen_NZ
otago.openaccessAbstract Only
dc.identifier.eprints381en_NZ
otago.school.eprintsFinance & Quantitative Analysisen_NZ
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