기업지배구조의 수준과 개선정도가 원가의 하방경직성에 미치는 영향

Cost stickiness can cause from agency problem(Anderson et al. 2003; Chen et al. 2012). The objective of this study is to investigate empirically the good and improved corporate governance is effective to mitigate the degree of cost stickiness. Unlike the prior research, the comprehensive level of corporate governance was measured by firm’s corporate governance score of KCGS in our study. The results of this paper are as follows. First, this study finds that the degree of firm’s cost stickiness tends to be lower when a firm has a higher corporate governance scores in total. The costs of all categories(cost of goods sold, selling and administrative costs, selling costs, wages expenses) are less sticky for firms which have higher corporate governance score in total. It suggests that good corporate governance is effective controlling mechanism to reduce managers’ opportunistic behavior. Second, We find that the costs of all categories(cost of goods sold, selling and administrative costs, selling costs, wages expenses) are less sticky for firms which have higher improved corporate governance score. It implies that improved corporate governance is effective for mitigating agency problem. On the other hand, we cannot find any significant differences in the degree of cost stickiness in separate corporate governance (same as protections of right of shares, board of directors, disclosures, auditing mechanism, allocation of firm performance). It suggests that individual elements of corporate governance is ineffective for mitigating cost stickiness but their integrated effects are effectively. Finally, we find that the improvement for board of directors, improved disclosures can significantly impact on cost stickiness. These findings provide implication for future study and disclosure policy of corporate governance in Korea. We tried to measured the integrated level and the degree of improvement of corporate governance score, it differs from prior studies. The results of our study reinforce empirical evidence related to the effectiveness of corporate governance. Our findings are more direct and strong empirical evidence that corporate governance can play an important role in controlling managers’ cost asymmetric behavior.