Equity Concentration, Agency Costs and Firm's Performance of Banks Listed on the Saudi Stock Market

Abstract

This paper examines the impact of equity concentration on agency costs as well as the impact of the agency costs on the performance of banks listed on the Saudi Stock Market. The relation is inspected using dynamic panel data two-steps robust system estimation for the period 2010-2013. The results show that the equity concentration has no significant effect on agency costs and agency costs has no significant effects on banks performance. The study finds no evidence to support the agency theory in banks listed on the Saudi Stock Market.