Equity Agency Costs Amongst Manufacturing SMEs

Equity Agency Costs Amongst Manufacturing SMEs The principal objectives in this paper are to assess and to build upon the recently published research of Ang et al. (2000) making a pioneering attempt to estimate equity agency costs in a large cross-sectional sample of smaller, non-publicly traded companies in the United States. The present research employs panel data for 871 manufacturing SMEs legally organised as proprietary companies, taken from the Australian federal government's Business Longitudinal Survey conducted over four financial years from 1994–1995 to 1997–1998. The two proxies for equity agency costs that are trialed – operating expense ratio and asset turnover ratio – both appear lower in more complex agency relationships. It is also found that greater enterprise growth is significantly more evident amongst SMEs with more complex agency relationships. Thus, it is possible that observed differences in values for the two equity agency cost proxies are not the direct consequence of differences in management and ownership structures; but, rather, of differences in the experience of enterprise growth, possibly enabled to some degree by the management and ownership structures adopted. This raises the question of whether, in fact, operating expense ratio and asset turnover ratio can be reliably used as proxies for equity-related agency costs in SME research. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Equity Agency Costs Amongst Manufacturing SMEs

Loading next page...
Kluwer Academic Publishers
Copyright © 2004 by Kluwer Academic Publishers
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
Publisher site
See Article on Publisher Site


You’re reading a free preview. Subscribe to read the entire article.

DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches


Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.



billed annually
Start Free Trial

14-day Free Trial