Corporate Governance、Managerial Overconfidence And Cost Stickiness

Cost stickiness describes the phenomenon that costs changes are asymmetric as the sales changes.At present,the researchers pay more attention on the theory of opportunism theory,which is originated from the separation of ownership.However,there are very few research on whether managerial overconfidence can influence the cost stickiness.Previous research show that,corporate governance can reduce the selfish behavior of the manager.But the research on whether the corporate governance can effect the managerial overconfidence is much less.Based on the data of China A-share manufacturing listed companies from 2012 to 2015,the paper build the model of cost stickiness.Then,the paper examines the existence of the cost stickiness and discusses the influence of managerial overconfidence on cost stickiness.Further,the paper examines the influence of corporate governance mechanism on the relationship between managerial overconfidence and cost stickiness.The empirical results show that:(1):cost stickiness is existed in China A-share manufacturing listed companies.(2):managerial overconfidence can increase cost stickiness.(3): good corporate governance can reduce the cost stickiness caused by managerial overconfidence.By reducing the degree of ownership concentration,companies can reduce the cost stickiness caused by managerial overconfidence.By separating the post of president and CEO,companies can reduce the cost stickiness caused by managerial overconfidence.This paper discusses the influence of managerial overconfidence on cost stickiness,and whether corporate governance can restrain managerial overconfidence to reduce cost stickiness.It can not only enrich related research on managerial overconfidence and cost stickiness,but also enlighten companies to improve corporate governance mechanism.