Free Cash Flow,Governance Of Board Of Directors And Cost Stickiness

With the continuous development of world economy, the competition requires managers to a deeper understanding of the cost of the product, by price advantage to attract more target customers. But when to dig deeper into the cost of exploration, the scholars found that the traditional into nature state and the actual changes in the cost of observing there is a huge difference. Traditional into nature state model contains a basic assumption, which is a simple linear relationship between cost and volume, but the study found that a basic assumption in reality often hard to do, will increase business course costs rise, volume down but not necessarily will bring the corresponding costs down, the change of the unconstrained broke the basic assumptions, the cost will cost of this kind of phenomenon is defined as the viscosity. Cost control is an important part of enterprise management, is also the focus of the evaluation of the company’s core competitiveness, low compression efficiency can expand profit margins, cost for gradually entering the high cost of manufacturing in China also has important strategic significance. So the cost concept of viscous force managers to understand the nature of meaning and concern for the change law of in-depth analysis of the actual into the effects of nature state of the company’s performance.This article first to comb and reviewed in this paper, the literature at home and abroad to cost sticky research results, summed up in three aspects including the existence of the viscosity of the validation, characteristics of the excavation and the related influencing factors. Then in the review of the principal-agent theory and the board of directors governance theory, on the basis of the opportunistic perspective, to the cost of free cash flow, the board of directors governance and the mechanism of viscous analysis in detail. At the end of the theory of bedding, this article selects A shares in Shanghai and Shenzhen two city A sample of739listed companies in manufacturing company, collect their 2010-2013, A total of2956related cost data, set up the free cash flow, the board size, the CEO and chairman of the board of two rights separation and the number of board meeting4research variables, the introduction of AB J model, and USES the descriptive statistics and multivariate regression analysis from the following three aspects:(1) the empirical inspection cost if viscosity exists in manufacturing listed companies in our country;(2) on the principal-agent theory, internal cost of free cash flow will promote sticky;(3) when gradually optimize the board of directors governance, can impact on the degree of viscous cost.The empirical results show that there is a widespread cost manufacturing listed companies in our country viscosity; When enterprises exist positive free cash flow, can produce promoting effect to the enterprise the cost of the cohesive; Both separation of the board of directors governance variables can improve the independence of the board decision, obviously alleviate cost viscous phenomenon; And the board size is small in our country can inhibit the production of viscous, but not through the test of significance:in the end, the board of directors meeting times can promote the director of the supervision and management, to reduce their self-interest, the board of directors meeting number is large can reduce the degree of viscosity. Finally, combining with the conclusion of this article puts forward relevant policy Suggestions.