A Review of Agency Costs in Corporate Governance

Agency cost is a basic problem which corporate governance needs to cope with.The inner governance structure and outer environment of a company will both influence agency cost.Agency cost can explain financing and macroeconomic performance in different countries,which should be controlled through inner and outer ways.The root of agency problems in Chinese state owned enterprises is multiple agency relation.We argue that this relation should be simplified;rights and responsibility should be balanced.Future researches should focus on the spillover effects of agency cost on corporate performance and macro-economy.