Financial Crisis,Competitive Strategy And Cost Stickiness

Research on cost stickiness can help us reveal the “black box” of firm cost management, and at present, the research of cost stickiness mostly focuses on the its existence,its characteristics, factors affecting it under a given uncertain environment. However under the volatility of macroeconomic, managers have to decide to how to control cost based on real uncertainty, which was not take into account in present research work. In this paper, using data for China’s listed company in stock markets of Shenzhen and Shanghai over the period 1999-2013,we dynamicly examine whether financial crisis in 2008 will affect the effect of competitive strategy on firm cost stickiness differently before and after the financial crisis. The main result are as following:1) selling costs and administrative costs as a whole behave sticky, and administrative costs differs from selling costs in cost stickiness. The stickiness of administrative costs behave sticky significantly, whereas the stickiness of selling costs is not significantly;2) The influence of different competitive strategy on cost stickiness is various. Differentiation strategy strengthens cost stickiness, while cost leadership strategy weakens cost stickiness; 3) In the case of financial crisis, cost behavior depends strongly on competitive strategies. After the 2008 financial crisis, the relation between differentiation strategy and cost stickiness is moderated, while the relation between cost leadership strategy and cost stickiness does not change.