Internal Control,Agent Cost And Cost Stickiness

Cost control is significant for the development of enterprises.The discovery of cost stickiness is conducive to the improvement of corporate governance and performance.Since the concept of cost stickiness has been put forward,the characteristics,motivation and economic consequences of cost stickiness are highly concerned by domestic and foreign scholars.As an important method of corporate governance,internal control plays an important role in the study of the relationship between agency cost and cost stickiness,as well as among internal control,agency cost and cost stickiness.In this paper,using the principal-agent theory,taking the agency cost as the breakthrough point and combining with other relevant theories,we studied the relationship and the influence mechanism between internal control,agency cost and cost stickiness.We analysed the following three questions:(1)Whether can internal control reduce agency cost and reduce the cost stickiness?(2)How about the influence mechanism between internal control,agency cost and cost stickiness?(3)Whether can the property rights effect the relasionship between internal control,agency cost and cost stickiness in chinese economic environment and institutional background?Taking companies listed on Shanghai and Shenzhen Stock Exchanges from 2009 to 2014 as research objects,we analysed the theories and the sample using WEISS model and fixed effect models.The results confirmed the four hypotheses of this study:(1)Internal control has a negative effect on agency costs.(2)Agency cost has a positive effect on cost stickiness.(3)Compared to the non-state-owned enterprises,the improvement of internal control is more conducive to decrease the level of cost stickiness in the state-owned enterprises.(4)The agency costs play a part alternative role between internal control and cost stickiness.The mediator effect of agency costs is different in the different nature of enterprises.Based on the conclusions of ths paper,we suggested that the improvement of enterprises need to strengthen the internal control system and the management compensation control,optimize the ownership structure and strengthen the supervision about board of directors and board of supervisors.The paper provides a reference for the realization of the value maximization and sustainable management of enterprises.