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SEPARATION BETWEEN MANAGEMENT AND OWNERSHIP: IMPLICATIONS TO FINANCIAL PERFORMANCE
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Zélia Maria da Silva Serrasqueiro 
, Paulo Maçãs Nunes
Abstract
Using panel data, this article shows that agency costs, a consequence of the separation between ownership and management, are not relevant in explaining the financial performance of Portuguese companies since, on the one hand, greater size, greater liquidity and higher level of risk do not mean decreased financial performance and, on the other, greater level of debt does not mean increased financial performance. The results indicate that the fact of managers being better informed than owners, about companies‟ opportunities and specific characteristics, does not necessarily mean behaviour that contributes to diminished financial performance in Portuguese companies.
Keywords: Agency Costs, Financial Performance, Information Asymmetry, Managers, Owners, Panel Data
How to cite this paper: Serrasqueiro, Z., & Maçãs Nunes, P. (2008). Separation between management and ownership: Implications to financial performance. Corporate Ownership & Control, 6(1), 16-21. https://doi.org/10.22495/cocv6i1p2
