Research Of Heterogeneity Of Institutional Investors On Cost Stickiness

Recent years,our government promotes the development of institutional investors in our country actively.They hope that the participation of institutional investors can improve the investor structure of listed companies and perfect corporate governance mechanism.However,our capital market is still imperfect,also investor protection environment and securities regulatory regime are weak.All these situations make it possible for institutional investors to take speculation actions.Considering of the business relations and cooperation advantages,many institutional investors choose to conspire with managers and damage the corporate governance.Thus,this paper explores the impacts and consequences of behavior of institutional investors from the aspect of corporate governance.There is very important theoretical and practical significance to perfect the corporate governance and promote the healthy development of our capital market.In this paper,we use the principal-agent theory and information asymmetry theory to analyze the motivation of managers’ behavior inducing cost stickiness and use corporate governance theory to analyze the relationship between corporate governance mechanism and managers’ behavior.We find that the existence of agency problem and information asymmetry provide motivation and condition for manager’s opportunistic behavior.Managers are inclined to increase or maintain the resource and compensation under their control when adjusting corporate resources and result in “cost stickiness”.As the important instructions of agency cost,cost stickiness can reflect the behavior of pursuing self-interest in adjusting the company resources.Based on corporate governance theory,corporate governance is a regime to control manager’s behavior of self-interest and perfect corporate governance can restraint the behavior of manager’s self-interest and control the level of cost stickiness.Based on the listed on the A-share companies during 2007-2015 as the research sample,using the method of multiple linear regression to study the relationship between the holding and heterogeneity of institutional investors on cost stickiness.The study shows that institutional investors don’t play the expected governance effect and control the level of cost stickiness.Oppositely,the institutional investor’s holding has enhanced the cost stickiness significantly.What’s more,the governance effects are very different between different kinds of institutional investors.Transactional institutional investors and domestic institutional investors have obvious enhancement effect on cost stickiness.However,stable institutional investors don’t have significant influence on cost stickiness.Institutional investors even weaken the cost stickiness significantly in some companies which has foreign institutional investors.On this basis,the paper explored the impacts of institutional investors’ governance effect from the two aspects of cross-listing and intern control environment.The research breaks through the limitation of choosing the degree of regional marketization as the variable of external regulatory environment.It can put some external governance factors into external supervision environment,such as legal system,property protection and securities supervision mechanism and so on.It is beneficial to investigate the impact of external governance environment on institutional investors’ governance effect.We find that cross-listing and high level of internal control will vanish the enhancement effect of institutional investors on cost stickiness.Finally,in order to promote institutional investor’s governance effect and control cost stickiness,this paper puts forward that focusing on development of stable investors and qualified foreign institutional investors for building rational and valuable investment conception.And considering the aspect of corporate governance,this paper puts forward that we should perfect our capital market quickly,encourage some qualified companies to list in other markets and improve intern control environment and so on.