Abstract
The present article assesses agency theory related problems contributing to the fall of shopping centers. The negative effects of the financial and economic downturn started in 2008 were accentuated in emerging markets like Romania. Several shopping centers were closed or sold through bankruptcy proceedings or forced execution. These failed shopping centers, 10 in number, were selected in order to assess agency theory problems contributing to the failure of shopping centers; as research method qualitative multiple cases-studies is used. Results suggest, that in all of the cases the risk adverse behavior of the External Investor- Principal, lead to risk sharing problems and subsequently to the fall of the shopping centers. In some of the cases Moral Hazard (lack of Developer-Agent’s know-how and experience) as well as Adverse Selection problems could be identified. The novelty of the topic for the shopping center industry and the empirical evidences confer a significant academic and practical value to the present article.
Publisher
Corvinus University of Budapest
Reference27 articles.
1. Acharya, V. – Naqvi, H. (2012): The seeds of a crisis: A theory of bank liquidity and risk taking over the business cycle. Journal of Financial Economics, 106(2): p. 349–366.
2. Allen, F. – Gorton, G. (1993): Churning Bubbles. Review of Economic Studies, 60: p. 813–836.
3. Allen, F. – Gale, D. (2000): Bubbles and Crises. The Economic Journal, 110(1): p. 236–255.
4. Argawal, A. – Mandelker, G. (1987): Managerial incentives and corporate investment and financing decisions. Journal of Finance, 42(4): p. 823–837.
5. Baxter, P. – Jack, S. (2008): Qualitative case study methodology: Study design and implementation for novice researchers. The Qualitative Report, 13(4): p. 544–559.