Agency costs faced by multinational corporations (MNCs) may be larger than those faced by purely domestic firms because

Question

Quizplus · Accepted Answer

All of the above are true. Monitoring of managers located in foreign countries is more difficult, foreign subsidiary managers raised in different cultures may not follow uniform goals, and MNCs are relatively large. These factors can result in higher agency costs for MNCs compared to purely domestic firms.

Agency Costs Faced by Multinational Corporations (MNCs) May Be Larger