Industry characteristics, agency theory, and the interaction of capital structure and dividend policy

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dc.contributor.authorNoronha, Gregory Marioen
dc.contributor.committeecochairShome, Dilip K.en
dc.contributor.committeecochairMorgan, George E.en
dc.contributor.committeememberJohnson, Dana J.en
dc.contributor.committeememberKeown, Arthur J.en
dc.contributor.committeememberKumar, Ramanen
dc.contributor.departmentFinanceen
dc.date.accessioned2014-03-14T21:20:49Zen
dc.date.adate2005-10-12en
dc.date.available2014-03-14T21:20:49Zen
dc.date.issued1990en
dc.date.rdate2005-10-12en
dc.date.sdate2005-10-12en
dc.description.abstractThe literature on agency theory has generally modelled and tested the firm’s dividend and capital structure decisions separately. In this dissertation, a model is developed based on agency cost considerations and dividends as a means of controlling equity agency costs, which simultaneously determines the optimal capital structure and payout rate for firms. However, to the extent that alternative, non-dividend mechanisms exist across industries and industry groups that may either diminish or nullify the effect of dividends in controlling equity agency costs, simultaneity is not predicted to be universal but a function of industry characteristics. This central hypothesis is tested on three industry groups: industrial firms, banks and electric utilities. Banks and utilities are regulated. Industrials are not regulated but are subject to other equity agency cost controlling mechanisms like the threat of takeover and incentive-based compensation packages. As hypothesized, the results for industrials show no simultaneity in the subsample where these other mechanisms are present, and simultaneity in the subsample where dividends are the dominant mechanism. For banks and utilities no simultaneity is found since regulation, through its effect on the debt agency cost curve of firms in these industries effectively precludes its occurrence.en
dc.description.degreePh. D.en
dc.format.extentviii, 121 leavesen
dc.format.mediumBTDen
dc.format.mimetypeapplication/pdfen
dc.identifier.otheretd-10122005-134410en
dc.identifier.sourceurlhttp://scholar.lib.vt.edu/theses/available/etd-10122005-134410/en
dc.identifier.urihttp://hdl.handle.net/10919/39752en
dc.language.isoenen
dc.publisherVirginia Techen
dc.relation.haspartLD5655.V856_1990.N676.pdfen
dc.relation.isformatofOCLC# 23202505en
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subject.lccLD5655.V856 1990.N676en
dc.subject.lcshCorporations -- Finance -- Decision makingen
dc.subject.lcshDividendsen
dc.titleIndustry characteristics, agency theory, and the interaction of capital structure and dividend policyen
dc.typeDissertationen
dc.type.dcmitypeTexten
thesis.degree.disciplineFinanceen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.namePh. D.en

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