E. A. Dorofeev. Impact of Investments Monitoring by a Large Stockholder on Corporate Governance
V.2, N2, 2004
The article discusses the one of the fundamental aspects of agency problem, i. e. information asymmetry and managers’ opportunities to gain private benefits to the prejudice of stockholders. The presence of a large outside stockholder may result both in strengthening of control over managers and collusion between them. A behavioral model describing this situation is presented. The model qualitatively supports the results of empirical studies about prevalence of collusion effect in Russian economy.