The Relationship Between Good Stewardship, Agency Costs, and Performance of South African Firms*

Abstract

This study examined the effect of good stewardship on agency costs and firm performance. The panel data analysis with the Panel Corrected Standard Errors (PCSEs) estimator was employed to analyze the effect of good stewardship on agency cost and the impact of good stewardship on the performance of 37 South African firms from 2007 to 2016. The findings of this study reveal that good stewardship has a significant positive effect on agency costs as well as firm performance, implying that the promotion of good stewardship should be accompanied by suitable strategies to manage additional agency costs.

Citation

Zungu, S., Kandaswami, N., Gunpath, T., Limalia, N., Reddy, T., Govender, D., Muguto, H.T. and Muzindutsi, P.-F. (2023), "The Relationship Between Good Stewardship, Agency Costs, and Performance of South African Firms*", Barnett, W.A. and Sergi, B.S. (Ed.) Comparative Analysis of Trade and Finance in Emerging Economies (International Symposia in Economic Theory and Econometrics, Vol. 31), Emerald Publishing Limited, Leeds, pp. 1-17. https://doi.org/10.1108/S1571-038620230000031001