Monitoring and Managerial Discretion Effects on Agency Costs: Evidence from an Emerging Economy

We analyzed the effect of managerial ownership, leverage, and discretion on agency costs 14,719 Chilean companies. The results instrumental variables (IV) regressions indicate that ownership capital structure have a negative non-linear costs. Managerial concentration is an effective means internal control over costs, discarding entrenchment effect. impact debt suggests for high leverage levels, would increase due to higher bankruptcy reduces costs; however, in firms with low growth opportunities, it increases them. These relevant implications firms’ corporate policy investors.