Research On Free Cash Flow,Inefficient Investment And Cost Stickiness

Cost management is a research hotspot of modern management accounting.As an important part of corporate governance,costs can directly reflect the decision-making investment status of an enterprise.At the same time,it also has an important impact on the value of the company and its long-term and stable development.Manufacturing industry occupies an important proportion in China's enterprises,and policy makers should deeply understand the importance of cost management in order to reduce the cost of enterprises to increase revenue.Historically,the relationship between cost and business volume in the theory of cost behavior has been considered to be linear.However,in 2003,Anderson et al.found that when business volume increases,the rate of change of costs is greater than the rate of change of costs when the volume of business declines.That is,costs exist.viscosity.At the beginning of the 21 st century,there were many studies on cost stickiness,but most scholars chose to focus on the existence and characteristics of cost stickiness.For example,Kong Yusheng proposed that cost stickiness prevails in Chinese enterprises.Sun Wei's research shows that stickiness exists.Turn characteristics.Among them,the influencing factors are mostly based on the governance perspective of the board of directors.For the two variables of free cash flow and non-efficiency investment,the impact on cost stickiness is also discussed separately from a single perspective,from the perspective of non-efficiency investment elements,and the perspective of free cash flow.There are few studies to dig deep into the source of costly stickiness.There is still a certain degree of research space for the cost-viscosity influence factors.Based on the above analysis,this paper first summarizes and reviews cost-adverse domestic and foreign related literature,and classifies it into the existence,impact factors,characteristics,and economic consequences of cost stickiness,sorts them out,and then sticks to cost stickiness and free cash flow.The relevant concepts of non-efficiency investment are defined.Based on the theory of free cash flow return,company agency theory and information asymmetry theory,the impact of free cash flow and inefficient investment on cost stickiness is explored,and four assumptions are put forward accordingly..(1)Whether there is a cost stickiness feature in China's manufacturing listed companies;(2)Whether non-efficiency investment will affect cost stickiness;(3)Whether free cash flow has a positive effect on non-efficiency investment;(4)Free cash flow Whether it will affect cost stickiness through inefficient investment.Taking the financial data of China's 428 manufacturing listed companies from 2010 to 2016 as a sample,the labor-intensive,capital-intensive and new long-term debts are added as control variables in the regression model.The empirical results show that in the listed companies of China's manufacturing industry The cost stickiness is obvious,non-efficiency investment promotes cost stickiness,and the internal free cash flow of the company will affect the non-efficiency investment behavior.Free cash flow will affect the cost stickiness through non-efficiency investment,that is,it acts as a mediator variable.Finally,according to the conclusions obtained in this paper,we propose to strengthen the management and control of free cash flow,such as increasing corporate liabilities appropriately to reduce self-interest in management spending,and improving corporate decision-making efficiency to encourage managers to invest cautiously,thereby reducing the stickiness level of corporate costs.