Managerial Empire Building Incentives,Cost Stickiness And Research&Development Investment

With the development of economy and society and the increasingly complex internal and external environment of enterprises,the cost management of enterprises is becoming more and more important.Strengthening cost management has become an important means for enterprises to improve economic efficiency,enhance competitiveness and sustainable development.In recent years,Cost Stickiness has become a hot topic at home and abroad,and has achieved a lot of research results.Cost stickiness is the mismatch between business volume and cost when managers carry out cost management.The traditional theory of cost behavior considers that there is a linear relationship between cost and business volume.However,this theory neglects that managers' cost management decisions will affect the process of cost changing with business volume,which makes the change of cost and business volume not completely synchronized.Scholars have also found that the relationship between cost and business volume is asymmetric,that is,the increase of cost with business volume is larger than that of cost with business volume.The magnitude of the decrease in volume.This phenomenon is called "Cost Stickiness".At present,the research on cost stickiness mainly focuses on its existence,nature,and influencing factors,and then the research on the economic consequences and specific application of cost stickiness has also formed certain research results.After Sun Yi and Liu Hao introduced the concept of cost stickiness for the first time,domestic studies on cost stickiness began.However,the vast majority of domestic scholars still remain The study of the basic problem of cost stickiness,and the study of the economic consequences of cost stickiness are few,and many believe that cost stickiness is an unfavorable factor.The 19th National Party Congress once again emphasized the need to firmly implement innovation-driven development strategies and regard strengthening the capacity for independent innovation as a strategic basis for the development of science and technology,as well as adjusting the industrial structure and transforming the central link of economic growth,and technological innovation and R&D investment are the realization of this.The key to the transformation from "Made in China" to "China's Intellectual Creation".Of course,the research and development of a company cannot be separated from the support of resources.Studies have shown that the redundant resources of the company can promote the R&D investment of the company.Then,does the residual resources caused by cost stickiness also affect the R&D investment of the company?Moreover,there is a view that the cause of cost stickiness is that due to the agency problem between managers and shareholders,managers are inconsistent with the optimal resource configuration when carrying out cost management,and there is a problem of cost stickiness.Then the management of the empire construction as a form of representation of the agency problem,its motivation may affect the cost management of the enterprise managers and the configuration of the remaining resources,and may then have an impact on the relationship between cost stickiness and corporate R&D investment.Based on this,this paper first uses the WEISS model,selects the financial data of listed companies in China from 2009 to 2016 as a sample,measures the size of cost stickiness,and then uses the calculated cost stickiness value to empirically test the relationship between cost stickiness and R&D investment.And examine the relationship between corporate cost stickiness and R&D investment in different property rights groups.Secondly,the paper uses free cash flow,company scale growth rate,and a fixed proportion of managers' salaries as the proxy variables to manage the imperial construction motives,and studies whether managers' imperial construction motives will affect managers' cost decision behavior and resources.Configuration behaviors,in turn,have an impact on the relationship between cost stickiness and corporate R&D investment.Finally,the paper further explores the impact of two internal governance mechanisms,the chairman and the general manager,and the degree of ownership concentration on cost stickiness and R&D investment relations,as well as tax incentives and external taxation policies.The impact of the relationship.The main conclusions are as follows:(1)The higher the cost stickiness,the stronger the investment intensity of R&D activities.In addition,the nature of property rights will have an impact on the relationship between Cost Stickiness and R&D investment,that is,compared with state-owned enterprises,non-state-owned enterprises' Cost Stickiness has a more significant positive relationship with R&D investment.(2)The management Empire builds dynamic opportunities to enhance the relationship between Cost Stickiness and R&D investment.The innovations in this paper are mainly reflected in the following three aspects:(1)The current exploration of the economic consequences of cost stickiness is less,and many believe that cost stickiness is an unfavorable phenomenon.This paper empirically examines the relationship between cost stickiness and corporate R&D investment.The conclusion shows that cost stickiness can play a positive role,and cost stickiness can also be a favorable factor.(2)From the perspective of resources,the paper considers that the surplus resources generated by cost stickiness will provide resources support for R&D investment,strengthen the intensity of R&D investment,and have a relatively new perspective.(3)Some scholars have conducted further researches on the relationship between agent problems and cost stickiness.They mostly use free cash flow as the proxy variable of the imperial construction motivation,but less directly study the relationship between imperial construction motivation and cost stickiness.For the first time,this paper introduces the motivation of managerial empire into the relationship between cost stickiness and R&D investment,and breaks through the limitations of existing research.The results of this study can help enterprises to actively use the remaining resources generated by cost stickiness to support their R&D investment,understand and understand the Cost Stickiness without neglecting its positive role,fully consider the impact of Cost Stickiness in resource allocation,formulate appropriate allocation strategies,and improve the efficiency of enterprise resource utilization.