This study demonstrated that managerial perquisite consumption—as one form of agency cost arising from the separation of ownership and management—can be reduced through the efficient monitoring activities of foreign investors, and indirectly proved the existence of a positive proportional relationship between foreign investor ownership and firm value. The ratio of entertainment expenses and confidential expenses to sales was used as a proxy for managerial perquisite consumption, as these costs are not investment expenditures for future corporate growth aimed at maximizing shareholder wealth, but rather costs determined at the discretion of managers seeking to maximize their own private interests. The sample for empirical analysis consisted of an unbalanced panel dataset of 4,721 firm-years comprising all manufacturing firms (excluding financial firms) listed on the Korean stock market over the 10-year period from 1992, when foreign investment was permitted, through 2001. The analysis results revealed that firms with higher foreign ownership had lower proportions of entertainment expenses, which can be viewed as evidence that transparent management is becoming established in firms with greater foreign investment. Firms with higher foreign investment ratios are making substantial efforts to enhance management transparency, and entertainment expense expenditures represent one aspect of this trend. Meanwhile, since managerial perquisite consumption represents agency costs between inside managers and outside shareholders, these results indirectly suggest that a positive linear relationship should hold between foreign ownership and firm value measured by Tobin's Q. Additional analysis examining the relationship between foreign investor ownership and firm value confirmed that firm value tends to increase as foreign ownership increases. This finding indicates that in the reality of Korean corporate governance—where internal and external mechanisms for preventing managerial moral hazard, such as M&A, the outside director system, and the strengthening of minority shareholders' rights at general shareholders' meetings, do not function effectively—foreign investors may serve as efficient monitors.