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Common institutional ownership and corporate cost stickiness —Evidence from China

Author

Listed:
  • Sun, Ying
  • Chen, Hongling
  • He, Wenli

Abstract

This study examines the impact of common institutional ownership (CIO) of firms on their degree of cost stickiness. Taking the data of China's A-share listed companies during the period 2007–2022 as sample, we find that firms with common institutional ownership (CIO) have a lower degree of cost stickiness. Mechanism test find that CIO mitigate the degree of cost stickiness by improving the governancing and monitoring efficiency and by promoting the transfer of information among portfolio firms. Heterogeneity tests provide evidence that the positive relation is stronger among non-state-owned firms and firms in monopolistic industries.

Suggested Citation

  • Sun, Ying & Chen, Hongling & He, Wenli, 2024. "Common institutional ownership and corporate cost stickiness —Evidence from China," International Review of Economics & Finance, Elsevier, vol. 96(PC).
    • Handle: RePEc:eee:reveco:v:96:y:2024:i:pc:s1059056024006919
    DOI: 10.1016/j.iref.2024.103699
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    More about this item

    Keywords

    Common institutional ownership; Cost stickiness; Monitoring; Agency conflicts; Information transmission;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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