Does Strong Corporate Governance Mitigate SG&A Cost Stickiness Caused by Agency Problem?

• Main Authors: WU,YI-TA, 吳宜達
• Other Authors: 吳徐哲
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/4fx4zv

碩士 === 國立中正大學 === 會計與資訊科技研究所 === 105 === Recent empirical research (Anderson, Banker, and Janakiraman, 2003) indicates that selling, general, and administrative (SG&A) costs behave asymmetrically. This phenomenon is also labeled cost stickiness. Prior studies have predominantly explained cost stickiness with economic factors such as asset intensity and uncertainty of future demand and have largely ignored the impact of managerial incentives on cost behavior. Chen, Lu, and Sougiannis (2012) indicates significant association between the agency problem and cost asymmetry. This study uses a sample of firms listed on the Taiwan Stock Exchange over the 2005-2012 period to examine the stickiness of SG&A costs caused by agency problem, and strong corporate governance mitigate SG&A cost stickiness, as hypothesized by Chen , Lu, and Sougiannis (2012). In this study, we find strong evidence that cost asymmetry is positively associated with the agency problem, as measured by CEO horizon, tenure. Moreover, strong corporate governance, like smaller board size, CEO⁄ Chairman separation, higher institutional holding, and lower the deviation between voting and cash flow rights, mitigate SG&A cost stickiness.