Azaz Zaman, Ummahani Akter, Md. ImranTalukder

Abstract: Corporations in emerging economies are dominated by agency theory as a corporate governance mechanism. Due to several privatized firms’ ineffectiveness within emerging economies, this paper argues that other approaches or theories need to be tested as an alternative to agency theory. Thus, this article explores the relevance of stewardship theory in emerging economies as an alternative to agency theory. Extensive literature review and a questionnaire survey were done to investigate the applicability of stewardship theory in emerging nations. The convenience sampling technique was adopted as a means to collect primary data. A well- representative sample, which includes both corporate managers and academicians, was used to survey the questionnaire. Then, a simple OLS regression model has been used to investigate the impact. In this model, corporate governance has been used as a dependent variable and six critical socio-psychological factors of emerging markets have been used as independent variables. Results show that all the socio-psychological factors harm corporate governance, casting doubt on the stewardship theory’s appropriateness as a replacement of agency theory in emerging economies. Therefore, this paper argues that despite being substantially popular in advanced countries, stewardship theory is not a suitable alternative to agency theory in emerging nations.

Keywords: Stewardship Theory, Agency Theory, Corporate Governance, Emerging Markets, Bangladesh

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