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Managerial Incentives on Cost Stickiness: Do Inside Debt Affect Manager’s Resource Adjustment Decisions?

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Authors
임현경
Advisor
황인이; 이창우
Major
경영대학 경영학과
Issue Date
2017-02
Publisher
서울대학교 대학원
Keywords
cost stickinessmanagerial incentivedebt agency cost
Description
학위논문 (석사)-- 서울대학교 대학원 : 경영학과, 2017. 2. 이창우.
Abstract
Agency Theory uses different compensation schemes to align conflicting interest between the agent and the principal. Following, Jensen and Meckling(1976), a vast amount of literature have dealt with equity-based compensation which reduces equity agency cost but have largely ignored the role of inside debt compensation in alleviating the debt agency cost. The motivation for this paper is to better understand inside debt and its impact on debt agency cost in managerial cost decision. Specifically, this paper will address the question, “Do inside debt affect manager’s resource adjustment decisions?” by examining the degree of cost stickiness. The findings in this paper are summarized as follows. First, inside debt incentives reduce the degree of cost stickiness. Second, CEO with high inside debt incentives cut costs more aggressively than CEO without the incentive. These findings support the hypothesis that CEO with high inside debt compensation will have incentives to adjust resource decisions to safeguard their value of future compensation
Language
English
URI
http://hdl.handle.net/10371/124714
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College of Business Administration/Business School (경영대학/대학원)Dept. of Business Administration (경영학과)Theses (Master's Degree_경영학과)
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