Using Korean listed company data from 2001 to 2008, We examine how the corporate internal governance mechanisms such as the ownership control structure, the board structure and foreign stockholders affect the agency costs as the management efficiency. To accurately analyze the effect on the agency costs, we apply the vector autoregressions with panel data at first. Using the panel VAR results, we estimates the effect of the internal governance mechanisms with system GMM method. Our results show that the regulation raised the ratio of outside directors in the board but the increases in the ratio do not reduce the agency costs. The results imply that the role of outside directors does not work as one of internal governance mechanism, and so the regulation on the outside director ratio need to be modified. on the other hand, empirical work shows that the management efficiency is not affected by the ownership structure. This means that increases in controlling shareholder’s ownership control right disparity does not reduce the management efficiency. However, we find that the export ratio and foreign ownership have the role of improving the management efficiency, because the empirical results show that increases in export ratio and foreign ownership reduce the agency costs.