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Abstract
The main objectives of the paper are to estimate the effect of ownership structure on a corporation's profitability and compare agency problems between high tech and traditional corporations. The study included four steps: descriptive statistics, multiple regression analysis, multiple regression analysis by size, and tests for homoscedasticity to refine our estimates. The results indicate that 1) traditional corporations have significant agency problems while high tech corporations have insignificant agency problems; 2) revenue growth rate was significantly associated with profitability for both large and small high tech corporations; and 3) revenue growth rate was significantly associated with profitability for small traditional corporations, but not for large traditional corporations.
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Abstract
The main objectives of the paper are to estimate the effect of ownership structure on a corporation's profitability and compare agency problems between high tech and traditional corporations. The study included four steps: descriptive statistics, multiple regression analysis, multiple regression analysis by size, and tests for homoscedasticity to refine our estimates. The results indicate that 1) traditional corporations have significant agency problems while high tech corporations have insignificant agency problems; 2) revenue growth rate was significantly associated with profitability for both large and small high tech corporations; and 3) revenue growth rate was significantly associated with profitability for small traditional corporations, but not for large traditional corporations.