Divakaruni, Anantha KrishnaMeuleman, MiguelWright, Mike2017-12-022017-12-022015http://hdl.handle.net/20.500.12127/5231Previous studies have relied predominantly on agency theory to understand relationships among stakeholders (actors) involved in a leveraged buyout transaction and explain inherent characteristics of LBO debt financing. However, traditional agency theory overlooks structural characteristics like dependencies and power-differentials between principals and agents. Using a multiple-agency framework on a sample of 6,609 LBO loan tranches that were issued during the period 1986-2012, we examine how power dynamics impact contractual outcomes among LBO participants. Our analysis highlights the asymmetric nature of power among agency partners. Agency conflicts are lower when lenders (principals) have a dependence advantage over PE- sponsors (agents) and higher when the latter possess more power in the relationship.enAccounting & FinanceEntrepreneurshipSmall and Medium sized Enterprises (SMEs)13513858266681896480