The short Question:Do you think ‘agency’ problems are likely to be more or less severe in Germany and Japan than in the United States? Why?
This would be expected that the agency problems are less severe in other countries, Because of the relatively small percentage of individual ownership. Some individual owners should decrease the number of diverse views concerning corporate goals. The increased percentage of institutional ownership could lead to a higher degree of agreement between owners and managers on decisions for risky projects. Institutions may be effectively monitor mechanisms on managers rather than individual owners, which should be based on the institutions' experience and resources with their own management.
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