The Effect of External Corporate Governance Mechanisms of Agency Costs on Listed Companies of the Tehran Stock Exchange

The goal of this study is to investigate the simultaneous effects of dividend policy, leverage, institutional ownership, and product market competition as external supervision and control mechanisms of corporate Governance on agency cost. In order to achieve this goal, we study 85 manufacturing companies among listed firms in the Tehran Stock Exchange during 1386-1391. To test the Hypothesis, panel data and Tobit regression model method is used. The results indicated that the product market competition and debt ratio negatively affect the agency cost while institutional ownership positively affects agency cost. However, dividend yield as a measure of dividend policy has no significant impact on agency cost.