Executives’ Military Experience,Corporate Governance And Cost Stickiness

China has entered a stage of high-quality economic development.In order to realize the economic transformation,the macro level puts forward the specific countermeasures of supply side structural reform and "three go,one drop and one compensation".Cost reduction is the key to improve economic benefits and maintain the competitive advantage of enterprises.Cost Stickiness affects the ability of enterprises to adapt to environmental uncertainty.Reducing costs is conducive to alleviate the performance pressure brought by cost stickiness.Cost Stickiness some extent reflects the ability and level of senior management resource allocation.To study the problem of Cost Stickiness from the perspective of senior management characteristics,we can find a strategic response to reduce costs from the perspective of corporate governance.Based on combing the related literature of Cost Stickiness and senior executives’ military experience at home and abroad,this paper explores the relationship between senior executives’ military experience and cost stickiness.In addition,the proportion of independent directors and product market competition are added as alternative variables of internal and external governance to verify the impact of senior executives’ military experience on Enterprise Cost Stickiness under different internal and external governance environments,which expands the perspective and content of the research.Clarify the concept of the research object,grasp the theoretical essence of high-level echelon theory,brand theory and agency theory,analyze and propose the hypothesis.Select the 2010-2019 Shanghai and Shenzhen A-share listed companies as the sample data,build the model,use the mixed OLS model for regression analysis,and select the fixed effect model,propensity score matching,adding the cross multiplication term of economic variables and executive change to test the robustness.On this foundation,it further examines the intermediary effect between senior executives’ military experience and cost stickiness,as well as the impact of property right heterogeneity on the relationship between them.The results show that the experience of senior executives in the military has restrained the Cost Stickiness of enterprises to a certain extent,indicating that the loyalty,self-discipline and courage to sacrifice formed by senior executives in the past military experience can play a governance role,alleviate the agency problem,and then restrain the cost stickiness.Taking the proportion of independent directors as the variable to distinguish the internal governance effect of the company,the group regression found that in the establishment with low ratio of independent directors,the supervision power of internal independent directors is insufficient.At this time,the senior executives with military experience will strictly restrict themselves,be loyal to the client,remedy for the shortage of the inward governance mechanism of the corporation and relieve the agency problem,which shows that the inhibition effect on Cost Stickiness is more significant;Taking the product market competition as the variable to distinguish the external governance effect of the corporation,the group regression found that in the enterprises with low product market competition,the external product market competition is weakened.At this time,the self-restraint mechanism formed by the excellent character of senior executives with military experience can play a governance role and alleviate the agency problem,which shows that the inhibition effect on Cost Stickiness is more significant.The mediating effect test results show that: management self-interest is part of the mediating variable between senior managers’ military experience and cost stickiness,that is,senior managers’ military experience can alleviate the agency problem by reducing managers’ self-interest behavior,so as to curb Cost Stickiness;The grouping test by distinguishing the nature of property rights found that the inhibitory effect of senior executives’ military experience on Cost Stickiness is more remarkable in non-state-owned enterprises,indicating that senior managements with military experience is less restricted in non-state-owned enterprises,can play its unique governance effect and can more effectively inhibit cost stickiness.The contribution of this paper is to reveal the inhibitory effect of senior executives’ military experience on cost stickiness,the governance role of senior executives’ military experience in enterprises and the substitution effect between other governance mechanisms,highlight the governance role of senior executives’ personality characteristics on enterprises,and expand the relative research on the economic consequences of senior executives’ military background and the influencing factors of cost stickiness.