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Abstract This article intends to review the theoretical aspects and empirical evidences made on agency theory. It is aimed to explore the main ideas, perspectives, problems and issues related to the agency theory through a literature survey. It discusses the theoretical aspects of agency theory and the various concepts and issues related to it and documents empirical evidences on the mechanisms that diminish the agency cost. The conflict of interest and agency cost arises due to the separation of ownership from control, different risk preferences, information asymmetry and moral hazards. The literatures have cited many solutions like strong ownership control, managerial ownership, independent board members and different committees can be useful in controlling the agency conflict and its cost. This literature survey will enlighten the practitioners and researchers in understanding, analysing the agency problem and will be helpful in mitigating the agency problem.

We estimate the distribution of television advertising elasticities and the distribution of the advertising return on investment (ROI) for a large number of products in many categories. Our results reveal substantially smaller advertising elasticities compared to the results documented in the literature, as well as a sizable percentage of statistically insignificant or negative estimates. The results are robust to functional form assumptions and are not driven by insufficient statistical power or measurement error. The ROI analysis shows negative ROIs at the margin for more than 80% of brands, implying over-investment in advertising by most firms. Further, the overall ROI of the observed advertising schedule is only positive for one third of all brands.

This paper studies the effect of portfolio manager ownership (i.e., “skin in the game”) on mutual fund risk taking. Using holdings-based risk change measures that capture managers’ ex ante risk choices, we find that portfolio manager ownership reduces both intrayear and across-year risk-taking activities. The relationship between ownership and risk reduction is particularly strong among managers with high agency issue–induced risk-taking incentives—for example, managers who face a more convex flow-performance relationship, have poor past performance, or are not compensated based on long-term fund performance. Funds with greater managerial ownership are also associated with lower levels of total risk and downside risk. Overall, portfolio manager ownership serves as an incentive alignment mechanism and has important implications for mutual fund investors. This paper was accepted by Amit Seru, finance.

In order to help enterprises to achieve high-quality development and improve the capital market regulatory policies by supporting with more factual basis from China, this paper conducts research on clarifying impact mechanism of digital transformation on M&A efficiency of listed companies. Taking the mergers and acquisitions of listed companies from 2007 to 2021 as a research sample, the influence mechanism of the digital transformation degree of companies on their M&A efficiency was studied. The research results show that the digital transformation of listed companies will improve their M&A efficiency. Digital transformation will reduce the degree of mispricing stocks of M&A companies, curb conflicts between managers and agents of M&A companies, and improve their M&A efficiency. Further research finds that the promotion effect of digital transformation on M&A efficiency is more significant in non-state-owned companies, with a higher degree of financing constraint and high analyst attention. In the future, regulatory authorities should actively promote the digital transformation of listed companies, curb mispricing and management agency problems in the capital market with digital governance, and improve the efficiency of mergers and acquisitions in the capital market. This paper not only provides a more factual basis on concrete case from China but also enriches the related empirical analysis on corporate digital transformation and M&A efficiency.

The article first describes characteristics of major infrastructure projects. Second, it documents a much neglected topic in economics: that ex ante estimates of costs and benefits are often very different from actual ex post costs and benefits. For large infrastructure projects the consequences are cost overruns, benefit shortfalls, and the systematic underestimation of risks. Third, implications for cost–benefit analysis are described, including that such analysis is not to be trusted for major infrastructure projects. Fourth, the article uncovers the causes of this state of affairs in terms of perverse incentives that encourage promoters to underestimate costs and overestimate benefits in the business cases for their projects. But the projects that are made to look best on paper are the projects that amass the highest cost overruns and benefit shortfalls in reality. The article depicts this situation as ‘survival of the unfittest’. Fifth, the article sets out to explain how the problem may be solved, with a view to arriving at more efficient and more democratic projects, and avoiding the scandals that often accompany major infrastructure investments. Finally, the article identifies current trends in major infrastructure development. It is argued that a rapid increase in stimulus spending, combined with more investments in emerging economies, combined with more spending on information technology is catapulting infrastructure investment from the frying pan into the fire.

Purpose This study aims to propose a moderated mediation model to investigate the moderating effects of environmental, social and governance (ESG) performance on the relationship between inefficient investment and firm performance and the mediating effect of firms that participate in institutional research on the relationship between investment efficiency and performance. This study also analyses the heterogeneity of the corporate nature, intensity of industrial research and development (R&D), industrial competition and regional marketization. Design/methodology/approach This study uses a panel data fixed-effects model to conduct a regression analysis of 1,918 Chinese listed firms from 2016 to 2020. A Fisher’s permutation test is used to examine the differences between state-owned and nonstate-owned firms. Findings Inefficient investment negatively impacts corporate performance and higher ESG performance exacerbates this effect by attracting more institutional research which reveals more problems. State-owned enterprises perform significantly better than nonstate-owned enterprises in terms of ESG transformation. Industrial R&D intensity, competition and regional marketization also mitigate the negative effects of inefficient investment on corporate performance. Practical implications This study suggests that companies should consider inefficient investments that arise from agency issues in corporate ESG transformation. In addition, state-owned enterprises in ESG transformation should take the lead to achieve sustainable development more efficiently. China should balance regional marketization, encourage enterprises to increase R&D intensity, reduce industry concentration, encourage healthy competition and prevent market monopolies. Originality/value This study combines the agency and stakeholder theories to reveal how inefficient investments that arise from agency issues inhibit value creation in ESG initiatives.

Regional parliaments have only limited formal possibilities to engage in the European Union’s (EU’s) multi-level system of governance. Our paper focuses on networking activities of regional members of parliaments (MPs) as informal attempts to make agency claims and as a main driver for perceived collective agency. We employ a relational perspective, taking into account the various stakeholders and environments which regional parliaments have to deal with in the EU. Engaging in such networks can enhance collective agency since such activity is linked to recognition and can open doors to new resources and networks. We use data from a survey of regional deputies in Austria, Germany, Spain, and the Czech Republic to investigate these associations. The results point to the importance of such activities for the perceived influence of regional parliaments on political decision-making in the region and for perceptions about the future role of regions in the EU. Contacts with European actors prove to be crucial in this respect since they can lead to new, agency-enhancing contacts and resources.

One of the central assumptions of global governance is that “problems without borders” require collaboration among multiple stakeholders to be managed effectively. This commitment to multistakeholderism, however, is not a functional imperative but the product of potentially contested agency recognition in the past. As such, we contend that a reconstruction of agency dynamics must be at the core of understanding global governance since global governors. We draw on a relational framework to lay out the basics of how to reconstruct the agency of global governors as it emerges through relations. Through these relations, entities-in-the-making advance agency claims or are ascribed agency by relevant others. Equally important from a relational perspective are recognition acts, which those claims trigger. We theorize in this paper that different types of agency claims paired with different recognition dynamics determine the outcome as to who is accepted to “sit at the table” for a particular issue. This theorization is required to (a) better understand current manifestations of global governance in their historical emergence and (b) discuss conditions of agency from a normative perspective to determine who should be the global governors of our time.

Can international organizations (IOs) gain independence from their member states, even if their decisions arise from member state bodies? While organizational independence is a precondition for the autonomy and agency of IOs, International Relations theory cannot yet grasp IO independence in the absence of institutional agents like secretariats. Drawing on collective actor theories with a strong micro-foundation from philosophy and sociology, this article demonstrates how organizational rules and procedures gradually shape organizational processes and produce collective effects that do not arise from the aggregation of member state activities. Member-dominated IOs can produce collective beliefs about relevant parts of the outside world that differ from the aggregated beliefs of member states. They can comprise institutionalized organizational goals and criteria that indicate collective intentions of organizational action and differ from the aggregate preferences of member states. They can comprise decision-making procedures that foster organizational decisions according to collective beliefs and intentions and reduce or abolish the relevance of bargaining and preference aggregation. Finally, they can act in ways that do not immediately rely on implementation action by the member states or by other lower-level actors. I conclude that analyzing the sources of independence of member-dominated IOs from their members sheds light on the nature and effects of IOs as group actors.

In order to help enterprises to achieve high-quality development and improve the capital market regulatory policies by supporting with more factual basis from China, this paper conducts research on clarifying impact mechanism of digital transformation on M&A efficiency of listed companies. Taking the mergers and acquisitions of listed companies from 2007 to 2021 as a research sample, the influence mechanism of the digital transformation degree of companies on their M&A efficiency was studied. The research results show that the digital transformation of listed companies will improve their M&A efficiency. Digital transformation will reduce the degree of mispricing stocks of M&A companies, curb conflicts between managers and agents of M&A companies, and improve their M&A efficiency. Further research finds that the promotion effect of digital transformation on M&A efficiency is more significant in non-state-owned companies, with a higher degree of financing constraint and high analyst attention. In the future, regulatory authorities should actively promote the digital transformation of listed companies, curb mispricing and management agency problems in the capital market with digital governance, and improve the efficiency of mergers and acquisitions in the capital market. This paper not only provides a more factual basis on concrete case from China but also enriches the related empirical analysis on corporate digital transformation and M&A efficiency.