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New publication for Prof. Morellec in the Review of Financial Studies

© 2018 EPFL

© 2018 EPFL

The paper of Prof. Morellec, “Agency Conflicts around the World”, is coauthored with Boris Nikolov and Norman Schuerhoff from the University of Lausanne, and has been accepted for publication in the Review of Financial Studies, one of the top three journal of this field.


We use a dynamic model of financing decisions to measure agency conflicts at the firm level for a large panel of 12,652 firms from 14 countries. Our estimates show that agency conflicts are large and vary significantly across firms and countries. Differences in agency conflicts are largely due to differences in firm-level governance, ownership concentration, and other firm characteristics. The origin of law is more relevant for curtailing governance excesses than for guarding the typical firm. Agency costs split about equally between wealth transfers and value losses from policy distortions, the latter being smaller in civil law countries where ownership is more concentrated. Governance reforms in Europe during the 2000s have significantly reduced agency costs.

Author: Carole Bonardi