The Influence of ExecutiveIncentives on the Strategyand Performance ofMicrofinance InvestmentVehiclesPontus Engstrom, Univ...
Introducing the research setting and the researchproblem                    Investment         Microfinance  Investor     ...
Theory and how it relates to present insightsAgency theory                      Asymmetric                      Informatio...
Theory of the motivated agent (Besley & Ghatak, 2005)•    Incentives are also perceived intrinsic benefits such as saving ...
Conceptual framework                                 Risk strategy                                                     +  ...
Hypothesizes•    Hypothesis 1: The higher the compensation, the higher the financial     performance of firms, thus showin...
Plan of study – cumbersome data collection•    Data collection from annual reports•    Interviews•    Research population:...
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The Influence of Executive Incentives on the Strategy and Performance of Microfinance Investment Vehicles

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The Influence of Executive Incentives on the Strategy and Performance of Microfinance Investment Vehicles

  1. 1. The Influence of ExecutiveIncentives on the Strategyand Performance ofMicrofinance InvestmentVehiclesPontus Engstrom, University of AgderFIBE doctoral colloquium 2013
  2. 2. Introducing the research setting and the researchproblem Investment Microfinance Investor Vehicle Institution
  3. 3. Theory and how it relates to present insightsAgency theory Asymmetric Information Investment Investor Contract Vehicle
  4. 4. Theory of the motivated agent (Besley & Ghatak, 2005)•  Incentives are also perceived intrinsic benefits such as saving lives, defending a country or teaching students.•  True for public institutions with a sense of collective output•  True for non-profits and microfinance with dual-return (social and financial) Mission wage differential …with mission drift
  5. 5. Conceptual framework Risk strategy + Executive Performance + compensation Mediating variable +Independent variable Dependent variable Controlling for: size, growth, leverage, inflation and ownership
  6. 6. Hypothesizes•  Hypothesis 1: The higher the compensation, the higher the financial performance of firms, thus showing that the principal-agency situation is handled by aligning the interests of the principal (investor) with the agent (management).•  Hypothesis 2: The higher the compensation, the higher the risk, thus showing that the principal-agency situation is handled by aligning the interests of the principal (investor) with the agent (management).•  Hypothesis 3: The higher the risk, the higher the financial performance of firms, thus showing that the principal-agency situation is handled by aligning the interests of the principal (investor) with the agent (management). 6
  7. 7. Plan of study – cumbersome data collection•  Data collection from annual reports•  Interviews•  Research population: ~ 100 Investment Vehicles (MIVs)•  Sample: ~ 20 MIVs•  Correlation analysis
  8. 8. 8

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