Recent studies suggest that agency costs of managerial discretion are lower in Japan than in the United States. This suggests that

Question

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The lower agency costs of managerial discretion in Japan suggest that there is less risk of managers misusing resources to pursue personal goals rather than maximizing shareholder value. This lower risk can result in lower costs of capital for Japanese firms compared to their US counterparts, even in a fully integrated international financial market.

Recent Studies Suggest That Agency Costs of Managerial Discretion Are