Registration address change and corporate cost stickiness: from the perspective of policy preference and policy burden

A change of corporate registration address will directly affect the development of listed firms, and also the districts in and out of which the firms move, thereby ultimately leading to the reallocation of capital resources. Therefore, corporate registration address change attracts great attention from the theoretical and practical circles. From the perspective of policy preference and policy burden, using the sample of Chinese A-share listed firms that have experienced trans-provincial change in their registration address from 2000 to 2016, this study investigates the impact of registration address change on corporate cost stickiness and the mechanism through which registration address change affects corporate cost stickiness. The results indicate that: (1) with many factors controlled, registration address change greatly enhances corporate cost stickiness; (2) in the discussion of the mechanism, it is found that the increased policy preference and the aggravated policy burden are two ways via which registration address change affects cost stickiness. Therefore, for listed firms that experience both policy preference and policy burden simultaneously because of their registration address change, their cost stickiness increases the most. The study not only enriches the current literature on the economic consequences of registration address change, links corporate registration with cost management, and enlarges the scope of corporate cost management; it also has practical significance for corporate registration management and political resource allocation in China as well.