For the MNC, agency costs are typically:
A) non-existent.
B) larger than agency costs of a small purely domestic firm.
C) smaller than agency costs of a small purely domestic firm.
D) the same as agency costs of a small purely domestic firm.

Question

Quizplus · Accepted Answer

MNCs have higher agency costs compared to small purely domestic firms due to the complexity of their operations and the need to coordinate activities across different countries and cultures. The larger size of MNCs can also lead to greater potential for conflicts of interest between managers and shareholders, resulting in higher agency costs.

For the MNC, Agency Costs Are Typically