Institutional Investors,Equity Balances And Cost Stickiness

In the business process of an enterprise,it is usually accompanied with production costs.Calculate and manage the costs of an enterprise is important to an accountant.If it can ensure the daily operation of the enterprise,reducing costs can bring huge economic benefits.In traditional management accounting theory,there is a symmetric relationship between changes in the cost of an enterprise and its operating income.Traditional cost habit theory deem cost changes as mechanical feedback of business volume changes.Managers' decisions cannot have a influence on costs.In recent years,many scholars have found that the increase in cost and expense as income grows is greater than the decline in cost and expense as income declines.The asymmetric relationship between cost and expense is called "cost stickiness".In recent years,many scholars have done a lot of research around cost stickiness.The reasons for the formation of cost stickiness are explained from multiple angles.Meanwhile,from the two aspects of corporate governance and external environmental factors,a large number of empirical studies on the factors affecting cost stickiness.The existing research shows that the self-interest behavior of management caused by the low level of internal governance is an important factor of the cost stickiness,and the excessive cost stickiness is also the performance of the low efficiency of cost management.Compared with individual investors,institutional investors have higher professional ability and motivation to take part in corporate governance,so it may have an influence factor for the cost stickiness.The effect of institutional investors on corporate governance is bound to be affected by the company's internal governance environment.As an important factor affecting the internal governance of the company,the impact of institutional investors on the cost stickiness must be affected.Therefore,this paper focuses on studying the effect of institutional investors on fee stickiness and how the influence of institutional investors on fee stickiness is different under different equity balance degree.In this paper,manufacturing companies listed on the A-share market from 2002 to 2018 is used as a sample.The statistical software stata15.0 is used to analyze the hypothesis proposed in this paper.The empirical results show that institutional investor ownership can significantly reduce the Cost Stickiness of enterprises.Based on the analysis of the impact of institutional investors' Shareholding on cost stickiness,this paper brings the equity balance into the analysis framework to expand the research content of cost stickiness.It is found that due to the rights disputes among shareholders,the efficiency of decision-making and the restriction of management are reduced,and the equity balance has a negative effect on the corporate governance environment,which limits the inhibition of institutional investors' holding on the cost stickiness,and the equity balance plays a negative role in regulating the relationship between institutional investors and cost stickiness.This paper further examines the mechanism of the effect of institutional investor holdings affect the cost stickiness.The empirical results show that the company's internal control level is a completely intermediary variable of the effect of institutional investor's shareholding on cost stickiness.Research shows,institutional investor's shareholding is to reduce the cost stickiness of the company by improving the internal control level of the company.Because the cash flow right and the control right are separated in the actual business operation of the company,the shareholder's shareholding cannot fully measure the impact of the shareholder on the company.This article further divides enterprises into three sample groups of absolute control,centralized relative control and decentralized control according to the criteria of actual controllers with voting rights greater than 50%,voting rights 30% to 50% and voting rights less than 30%.The empirical results show that the inhibitory effect of institutional investor holdings on cost stickiness is significant in the centralized relative control group,but not significant in the absolute control group and decentralized control group.Current research shows that the nature of the property rights of enterprises effect institutional investors participate corporation governance.This article divides the sample into state-owned enterprises and non-state-owned enterprises for inspection according to the nature of property rights of enterprises.It is found that institutional investors have no significant inhibitory effect on Cost Stickiness in state-owned enterprises.Institutional investors have a significant inhibitory effect on cost stickiness in non-state-owned enterprises.In the end,a series of endogenous and robustness tests were conducted to ensure the reliability of the conclusions of the study.