A Study On The Impacts Of Managerial Power Over Expense Stickiness Based On The Nature Of The Property Rights

In recent ten years, researches have confirmed that expenses of listed companies are “sticky” and managers' opportunism behavior was considered to be important reason for the expense stickiness. The power of the manager determines its ability to implement the opportunism behavior. Scholars have found that as managerial power increases, managers' rent-seeking ability significantly enhance as well and they will more pursue personal interests. Since regulations, corporate governance mechanism, market discipline and supervisory policy etc. are diverse among the listed companies of different property rights nature, they face diverse agency conflict and the impact of management power is different too. With the key point of managerial power, this paper selects the manufacturing listed companies in A—share market of Shanghai Stock Exchange and Shenzhen Stock Exchange from 2010 to 2014 as the research objects to make an empirical study on the impacts of managerial power over expense stickiness and compares the differential degree of expense stickiness and impacts of managerial power over expense stickiness between state-owned listed companies and private listed companies based on the nature of the property rights.The empirical results show that expense stickiness really exists in Chinese manufacturing listed companies, that selling, administrative expenses increase on average 0.649% per 1% increase in sales but decrease only 0.305% per 1% decrease in sales. Compared with private listed companies, the degree of expense stickiness in state-owned listed companies is higher since the agency problem is more serious. There is a significant positive correlation between managerial power and expense stickiness and this positive correlation is larger and more significant in the state-owned listed companies.