
that are unusually risky or long-term in nature. In any event, it seems fair to
characterize shark repellent-adopting firms as relatively good performers when
compared against industry counterparts.
VII. MEASURES OF FIRM FINANCIAL POLICY
According to the management-entrenchment hypothesis, shark repellents are
adopted to enhance the job security of inefficient or otherwise self-interested
management (see Mahoney and Mahoney, 1993). Any such failure to adopt opti-
mal performance standards and financial policies is a type of agency problem that
arises when slack in the managerial labor market permits managers to pursue
value-reducing projects with excess ...