A Study On Free Cash Flow,Corporate Governance And Expense Stickiness

Traditional cost behavior model, the volume of business is key factor of enterprise total cost, the existing relationship between the cost and volume of business is a linear, symmetric relationship, which is the ideal environment of a hypothesis, in the process of production and operation of enterprises still exist a variety of cost impact factors, so that the relationship between the cost and volume of business is not is linear and symmetric. After the concept of Cost Stickiness was first proposed by Anderson et al in 2003, many scholars at home and abroad have carried out a series of research on the problem of cost stickiness. In fact, the cost stickiness is common in the enterprise, so it is very important to study the cost stickiness.The starting point of this paper is the agent theory, after the existence of relevant cost stickiness literature are summarized and summarized, analyzed the free cash flow impact on the management and self expense stickiness, and then analyze the corporate governance at the level of the cash flow of the corresponding cost stickiness effect,finally, based on theoretical analysis last, this paper selects the 2010-2014 Shanghai and Shenzhen two city 945 A shares of manufacturing listing Corporation as research sample, using the research methods of empirical analysis and comparative analysis,the listing Corporation Cost Stickiness existence, free cash flow on Cost Stickiness and different levels of free cash flow under the impact of corporate governance on Cost Stickiness differences three problems have been studied.Empirical study found that listed companies do in general are the characteristics of Cost Stickiness; the level of different corporate free cash flow can indeed have different effects for management of self-interest and and the degree of Cost Stickiness has a positive correlation; corporate governance under the different levels of free cash flow of the Cost Stickiness have certain inhibition, free cash flow is abundant in the inhibitory effect is more obvious. Therefore, this paper from the corporate governance in listed companies to reduce the problem of cost stickiness is proposed: optimizing the equity structure; optimize the board structure, improve the independent director system and to further strengthen the management equity incentive mechanism is proposed.