Security Analysts’ Monitoring Activity: Does it Reduce Agency Costs?

Abstract

This study is motivated by the work of Jensen and Meckling who proposed that Security analysts play a monitoring rol that could help reduce agency costs in companies “The role of security analysts i crucial for market efficiency because they provide relevant information to investors. It is found that for a certain extent, Malaysian security analysts play a monitoring role in reducing agency costs. Furthermore, institutional ownership and Size of companies could significantly explain Malaysian security analysts’ monitoring activity.