Vertical and Horizontal Agency Problems in Private Firms: Ownership Structure and Operating Performance

Abstract We investigate how ownership structure influences operating performance and implied agency costs. Our sample includes over 42,000 U.K. private public firms. document several new results of considerable economic significance relating to i) horizontal costs arising from unequal within firms, ii) amplification joint presence the same firm problems vertical separation control, iii) mitigation in wrought by a second large shareholder, iv) impact complex structures, v) cost differences between firms comparable