Debt Governance, Empirical Study Of Manager Behavior And Cost Stickiness Of Chinese Listed Companies

Cost management is an important content of enterprise management. Strengthening cost management is an important way to improve enterprise performance. Cost behavior is an important concept in cost accounting which refers to the linear relationship between the change of the total amount of cost and the activity of organizations. Cost behavior assumes that the cost of enterprise is not affected by the enterprisers’management decision. With development of further research on cost behavior, the change between cost and the activity level is asymmetric. The increase of the activity level leading to the increase of the cost is greater than the decrease of the activity level leading to the decrease of the cost, which is called "cost stickiness". The existence of the cost stickiness leads to be in a new perspective to understand the rule of cost change, which more effectively improves the management level of enterprises. Existing research shows that the cost stickiness is existed. Some scholars study the industry difference of cost stickiness and the influence aspects of it. Most scholars study that management behavior has influence on the cost stickiness. Few scholars put debt governance into the research framework. Therefore, this article tries to apply the debt governance, management behavior and the cost stickiness into the same framework for a further study.This thesis structure arrangement is as follows including six parts. The first part is an introduction which illustrates the research background, theoretical and practical significance and innovation of this thesis finally. The second part is literature review. Chapter 2 includes the summary of the literature about debt governance, management behavior and cost stickiness at home and abroad. Based on the above, we summarize and analyze the status of existing literatures so that we study this subject more easily. Chapter 3 is the theoretical analysis and hypothesis deduction. The main theory of this article includes principal-agent theory, information asymmetry theory, free cash flow hypothesis and debt governance theory. In this part we study the relationship of management behavior of listed companies in China, debt governance and cost stickiness. Through the analysis of the basic theory and hypothesis we carry on for further study. Chapter 4 is the research design. This part firstly elaborates the method of sample selection and then defines the selection of variables. Finally, design corresponding models according to the existing hypothesis. Chapter 5 is the empirical analysis. First of all, the selected samples are applied to descriptive statistics analysis, correlation analysis and multiple regression analysis. From the results of the test we can tell the relationship of debt governance, managers’behavior and cost stickiness. Chapter 6 is divided into research conclusions, policy recommendations and limitations. Conclusions are summarized based on previous studies. The cost control decision which helps enterprise to cost control is put forward. Finally the limitations of existing study are pointed out in this paper.Using data for Chinese listed companies in stock markets of Shanghai and Shenzhen over the period 2010-2014, we find three conclusions:(1) The cost stickiness is common. Because management fees can be manipulated, the stickiness of management expense is greater than that of selling expense;(2)" Building empire "behavior of managers enhances the cost stickiness;(3) The debt governance can restrain managers "Building empire" behavior,so the cost stickiness decrease. The short-term debt can inhibit the "empire building "behavior and decrease the cost stickiness while the effect of long-term debt is not obvious. In addition, bank loan of the debt financing is greater than the commercial credit to decrease the cost stickiness.The innovation of this article includes two aspects:(1) From the existing research, it is the first time to introduce the debt governance to the framework of "managers behavior and cost stickiness", which breaks through the original perspective of governance mechanism;(2) Due to the manager behavior of listed companies, the different kinds of debt have different influence on the cost stickiness. The enterprises improve enterprise cost control level through the debt governance.