A Study On The Effect Of Prior Sales Changes On Cost Stickiness Under The Perspective Of Debt Restraint

Cost stickiness has become a hot research topic in the field of management accounting.Costs are termed sticky if it is “easy to increase but hard to decrease”,and cost is termed anti-sticky when it is “easy to decrease but hard to increase”.The direct cause of cost stickiness is managers' asymmetry decisions to different directions of sales changes.The ultimate reason is the existence of adjustment costs and managers' optimistic expectations.However,both adjustment costs and managers' optimistic expectations can lead to advantages as well as disadvantages.,and it is necessary to get a deep understanding of the connotation of cost stickiness.However,in the practical work,most managers consider the factors of influence on cost stickiness is only limited to the factors in this period,ignoring some factors in the early period or they are too optimistic to forecast the economic situation in the future.As a result,they lead to a waste of resources.And for the disadvantages of sticky cost,managers tend to deal with it from the internal governance perspective rather than external perspective of the creditors.Based on the deep analysis of the adjustment costs and managerial optimism,this paper takes manufacturing listed companies annual report of 2001-2014 from A stock of Shanghai and Shenzhen as samples for empirical research.The first step is to study the influence of prior sales changes on cost stickiness,using a two period model,and a three period model to test.Then,in order to study the influence of debt constraints on cost stickiness,this paper takes the debt constraint variables into two models,constructing a new empirical model to do the empirical test.The results show that:(1)Cost stickiness exists in China's Shanghai and Shenzhen A shares listed companies of the manufacturing industry,and it takes on conditional stickiness,that is to say cost in this period is sticky when prior sales increase,and anti-sticky when prior sales decrease.(2)Operating costs,selling expenses,administrative expenses shows certain degree of cost stickiness,and behaves significantly.(3)Debt constraint can significantly restrain the degree of sticky cost when prior sales increase,but shows insignificantly when prior sales decrease.(4)Considering the debt maturity,short-term debt has a better constraint effect;considering the the source of debt,debt from bank has a better constraint effect.