Research On The Cost Stickiness Of Listed Companies In China

Cost management is an important part of corporate management,it involved in thecost analysis, cost decision-making,cost control, and a series of scientific managementbehavior. Strengthen cost management is important for enterprises to enhance economicefficiency, and as important in the accounting profession areas.In recent years,scholarshave found that the cost and sales is not a linear relationship, the marginal cost isasymmetry between the different directions of the sales change,this is cost stickiness. Theasymmetry is when the sales decline, the decrease of cost is less than the increase of cost atthe same volume.This has led to a new thinking to the cost of traditional accountingtheory.What factors cause the cost stickiness phenomena?Scholars have studied thefactors of cost stickiness, but haven’t got the a unified conclusion.The are objective andsubjective factors that affect the cost stickiness.Cost stickiness is the result of costmanagement behavior,so the managers’ behavior has affect on the cost stickiness. But untilnow,the study on the affect of manager behavior to cost stickiness is remain in thetheory,there is few scholar make empirical study in this area.In this paper the authorinterprets the motivation of cost stickiness from a new perspective,and use empiricalmethods to study the affect of overconfidence on cost stickiness.On the basis of related theories as well as domestic and foreign literature,this paperstudy the affect of managers’ overconfidence on cost stickiness from the view of behavioralfinance theory.This paper use the sample of listed companies in the Shanghai andShenzhen A-share market to make empirical study.We find that:(1)Cost stickiness isexisted in the listed companies in China.(2)Cost stickiness will reversal over longertime-horizons.(3)Managers overconfidence will make the degree of cost stickinessgreater.(4) Managers overconfidence can inhibit the reversal of cost-stickiness.This paper use a new perspective to study the cost stickiness, the results can makethe managers have a better understanding on cost behavior, and thus be able to predict thecost changes more accurately in the operating environment, and make right decisions topromote enterprise performance.