The Influence Of Heterogeneity Of Institutional Investors On Corporate Cost Stickiness

Because of the separation of ownership and management,the objective of the management who can control the main resource of the company and the goal of the company's shareholders is not exactly the same.The management who is considered as a rational economic man won't manage company completely according to shareholder's interests due to self-interest motivation.It is called the agency problem.The agency problem is very prevalent in the company.Because of the existence of agency costs,when sales increase,for one thing the managements will raise their wages,for another they will continue to increase the resources of controlled.When sales decrease,the managements are not willing to lower their wages on the one hand,on the other,they are more reluctant to reduce the resources which they can control.This asymmetric change in cost is known as "sticky".Compared to individual investors,institutional investors which are considered as an important external supervision power master more resources and information which can help them make better decision.Thus,institutional investors are more capable to supervise the company in a low cost way.As one of the shareholders of the company,institutional investors can actively participate in corporate governance and improve the governance of listed companies,reduce the agent costs of management,restrain the "stickiness" of listed companies.The higher proportion the institutional investors hold,the "stickiness" of listed companies are more likely suppressed.Due to different institutional investors are different in the investment objective,capital resource,investment scope and regulatory requirements,different institutional investors may have different effects on the company's "sticky".From the perspective of the purpose of institutional investors holding stock and whether institutional investors has existing or hidden business contact with the company,the institutional investors are classified as independent institutional investors and dependent institutional investors.Compared with dependent institutional investors,independent institutional investors have an obvious inhibitory effect on the "stickiness" of listed companies.In addition to independence,the length of institutional investors' holding shares also influences the effect of their participant of corporate governance.Combining independent factors and stable factors,this paper argues that relative to the dependent institutional investors,the more stable the independent institutional investors hold,the "stickiness" of listed companies are more likely suppressed.So the relevant government departments should vigorously develop the independent institutional investors,support and guide the independent institutional investors to invest stably,increase the proportion of stable investment in the independent institutional investors.