Key points are not available for this paper at this time.
ABSTRACT Internal governance is the bottom-up governance mechanism within the top management team (hereinafter referred to as “TMT”) through which key subordinates internally monitor the Chief Executive Officer (CEO). We find that cost stickiness is negatively associated with internal governance after controlling for legitimate economic reasons of cost stickiness, suggesting that internal governance mitigates agency-based cost stickiness. Consistent with the agency explanation, the results show that the impact of internal governance on cost stickiness is stronger for firms with lower future-value creation of selling, general, and administrative (SG G30.
Zhang et al. (Thu,) studied this question.