Financial Opening Deepening, Managerial Ability, and Corporate Cost Stickiness

Abstract

This paper empirically examines the impact of managerial ability on corporate cost stickiness among all non-financial listed companies in China's Shanghai and Shenzhen A-shares, following the implementation of the "Shanghai-Hong Kong Stock Connect," a policy for deepening financial opening. The empirical results suggest that managerial ability can significantly mitigate corporate cost stickiness after financial opening deepens, and this conclusion holds true after a series of robustness tests. Mechanism tests show that the mitigating effect of managerial ability on corporate cost stickiness is achieved by improving the internal control levels of enterprises.