Research On The Influence Of Cross-Ownership On Enterprise Expense Stickiness

The report of the 19 th National Congress of the Communist Party of China stressed the need to "clear up and abolish all kinds of regulations and practices that hinder the unification of the market and fair competition".In June 2022,China amended the Anti-monopoly Law,emphasizing fair competition examination in the market for the first time.The purpose is to ensure a level playing field in the market,break down market segmentation and accelerate the construction of a unified national market.Cross-Ownership is the product of continuous improvement of capital market.As the capital market matures,in order to pursue more returns,some powerful investors will invest in several enterprises in the same industry at the same time.The phenomenon of social network connection among enterprises based on Cross-Ownership is very common in domestic and foreign capital markets,and it is an important factor affecting the operation and management of enterprises.Cross-Ownership,while using the advantages of information resources to achieve synergies,also have the motivation to intensify the collusion of interest groups through hidden channels,distorting the market price mechanism.At present,the academic circles are mainly concerned about the synergistic effect produced by the Cross-Ownership and pay insufficient attention to its negative effects.Therefore,it is of great significance to study the influence of Cross-Ownership on the operation and management of enterprises from the perspective of market collusion in order to ensure a fair competition environment in the market,optimize the business environment and build a high-standard market system.From the perspective of cost management,based on the review of relevant literature on Cross-Ownership and expense stickiness,combined with cost behavior theory,market competition theory and principal-agent theory,this paper puts forward the competitive hypothesis of Cross-Ownership and expense stickiness.Taking A-share listed companies from 2007 to 2020 as the research sample,this paper tests the hypothesis by constructing OLS model regression,and carries out robustness test,impact mechanism analysis,action path analysis and heterogeneity analysis.The results show that:(1)Cross-Ownership significantly increase the stickiness of corporate expenses,which is manifested by the collusion effect of Cross-Ownership in the market.Moreover,the reliability of the conclusions in this paper is guaranteed by the two-stage Heckman test,the substitution of explanatory variables and the robustness test of the explained variables.(2)From the perspective of impact mechanism,the fundamental reason for Cross-Ownership to increase the stickiness of corporate expenses is market collusion,i.e.the higher the industry concentration,the higher the market competitive position and the stronger the market power of Cross-Ownership,the greater the negative impact of Cross-Ownership.(3)From the perspective of action path,Cross-Ownership mainly affect the stickiness of corporate expenses by appointing directors and reducing equity incentives.(4)From the perspective of mitigation mechanism,improving the degree of equity checks and balances,the quality of internal control,the quality of information disclosure and the quality of audit can mitigate the increase in expense stickiness caused by collusion of Cross-Ownership.The research contribution of this paper mainly includes the following three aspects:(1)the economic consequences of Cross-Ownership are further expanded from the perspective of market collusion,which provides evidence support for a comprehensive understanding of the impact of Cross-Ownership on the operation and management of enterprises.(2)the impact of ownership structure on expense stickiness is expanded from the perspective of social network connection of shareholders,which enriches the research on influencing factors of expense stickiness.(3)it provides empirical support for reducing the negative impact of Cross-Ownership and revising relevant anti-monopoly policies and regulations.