The Analysis of Agency Theory: A Research for Shuozhou Coal Economy Development

Abstract

Agency theory was presented by Jensen and Meckling in 1976. Agency theory mainly involves the contractual relationship between the provider of the enterprise resource and the user of the resource. Agency theory is developing from the researching of internal information asymmetry and incentive problems. According to agency theory, the owner of the economic resource is the principal, the manager who is responsible for the use and control of these resources is the agent. And the central task of the agency theory is to study how the client of can design the optimal contract incentive agent under the conflict of interest and information asymmetry. While if the interests of principal and agent are not exactly the same, the principal in the information disadvantage and can not entirely on the agent supervision, the agent has the motive for their own interests, and makes damage to the principal, it will result in the agent problem. This paper combs the related theory of agency theory firstly, and then combines the case to analyze the relative theories, and finally suggest recommendations as to how the issues should be addressed.