Bianchi, Milo and Luomaranta, Henri (2021) Agency costs in small firms. TSE Working Paper, n. 21-1252, Toulouse

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We explore how the separation between ownership and control a§ects Örm productivity. Using administrative panel data on the universe of limited liability Örms in Finland, we document a substantial increase in productivity when the CEO obtains majority ownership or when the majority owner becomes the CEO. We exploit plausibly exogenous variations to CEO turnover, induced by shocks to the CEO spouseís health. Extending the analysis beyond typical samples of large public Örms, we show that our e§ects are stronger in medium-sized private Örms. We also investigate possible mechanisms and provide suggestive evidence that increased ownership boosts CEOís e§ort at work.

Item Type: Monograph (Working Paper)
Language: English
Date: August 2021
Place of Publication: Toulouse
Uncontrolled Keywords: agency costs, Örm productivity,, CEO ownership.
JEL Classification: D24 - Production; Cost; Capital and Total Factor Productivity; Capacity
E23 - Production
G30 - General
L25 - Firm Performance - Size, Diversification and Scope
M12 - Personnel Management
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 21 Sep 2021 07:35
Last Modified: 23 Sep 2021 12:13
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