The Impact Of Managerial Power On Cost Stickiness

The Cost Stickiness is a hot topic in the field of cost management,which means costs rise more to increase versus decrease in sales.It indicates that the stickiness is not only related with sales,but also related with managers' behavior when they adjust resources.When the internal and external governance mechanism of the enterprise is weak,management power can't be effectively restricted;they're likely to use its power to increase resource control to expand the scale of enterprises to enhance personal status,reputation and on-the-job consumption level,so as to seek private benefits,which causes cost stickiness.This paper is based on the perspective of agency cost,examing the correlation between managerial power rent seeking and enterprise cost stickiness.By introducing the two regulating variables of equity balance and institutional investors,this paper provides a new idea for enterprises to improve corporate governance structure,strengthen supervision and restriction to management,and reduce cost sticky problem.Based on the principal-agent theory,the paper theoretically expounds the definition,formation mechanism and economic consequences of cost stickiness.Secondly,combined with the existing research results,the paper put forward the hypothesis in this paper by way of logical deduction.And using the data of China's listed companies from 2011 to 2015 as samples,empirical analysis and test are carried out through the construction of the comprehensive measurement index and multiple regression model of management power.The following conclusions are drawn:managerial power is positively related to the Cost Stickiness of enterprises.Equity balance can inhibit the positive correlation between managerial power and Cost Stickiness of enterprises.Compared with the companies with lower equity balance,the positive correlation between managerial power and cost stickiness is relatively weak in companies with higher equity balance.Institutional investors can weaken the positive correlation between management power and cost stickiness.The paper further divides institutional investors into stable institutional investors and transactional institutional investors and finds that compared with transactional institutional investors;stable institutional investment can significantly weaken the positive correlation between managerial power and cost stickiness.