Subsidies and Corporate Governance – An Agency Approach

Philip C. Hanke; Klaus Heine

doi:10.1002/mde.2665

Subsidies and Corporate Governance – An Agency Approach

Philip C. Hanke^*
, Klaus Heine

^*Corresponding author for this work

Law and Economics

Research output: Contribution to journal › Article › Academic › peer-review

1 Citation (Scopus)

Abstract

The literature on subsidies conceives state aids as always beneficial to the aid-receiving firm. However, the picture changes if agency problems are assumed between the managers and owners of the firm. In this case, subsidies may run counter not only to the desired result of the aid grantor but also to the interests of firm owners. Managers may divert subsidies into their own pockets, thereby deflating firm value.

Original language	English
Pages (from-to)	256-264
Number of pages	9
Journal	Managerial and Decision Economics
Volume	36
Issue number	4
DOIs	https://doi.org/10.1002/mde.2665
Publication status	Published - 9 Mar 2014

Bibliographical note

Publisher Copyright:
© 2015 John Wiley & Sons, Ltd.

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This output contributes to the following UN Sustainable Development Goals (SDGs)

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SAI 2008-06 BACT

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10.1002/mde.2665

http://hdl.handle.net/1765/57429

Cite this

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title = "Subsidies and Corporate Governance – An Agency Approach",

abstract = "The literature on subsidies conceives state aids as always beneficial to the aid-receiving firm. However, the picture changes if agency problems are assumed between the managers and owners of the firm. In this case, subsidies may run counter not only to the desired result of the aid grantor but also to the interests of firm owners. Managers may divert subsidies into their own pockets, thereby deflating firm value.",

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AB - The literature on subsidies conceives state aids as always beneficial to the aid-receiving firm. However, the picture changes if agency problems are assumed between the managers and owners of the firm. In this case, subsidies may run counter not only to the desired result of the aid grantor but also to the interests of firm owners. Managers may divert subsidies into their own pockets, thereby deflating firm value.

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ER -

Subsidies and Corporate Governance – An Agency Approach

Abstract

Bibliographical note

UN SDGs

Research programs

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