Research On The Influence Of Cost Stickiness On Accounting Conservatism Of Manufacturing Listed Companies

With the continuous changes of the domestic and foreign economic situation,the internal management accounting enviroument of enterprises in China is also facing new risks and challenges,raising a wave of research on eost stickiness.Due to adjustment eost,agency problem and managers' optimistie expectations and other factors,the cost of enterprises is characterized by stickiness.lt is quite different from the traditional eost theory in the past,that is,in an ideal environment,cost y presents a linear relationship with the change of business volume x,more and more studies have found that cost as deduction item of income,when business volume increases,the increase in the cost is more than when business volume reduces t,namely cost and business volume of asymmetry phenomenon.This phenomenon is especially significant in the manufacturing industry due to the poor capital mobility in the manufacturing industry.Accounting conservatism is one of the eight requirements of accounting information quality,which is an important principle affecting the quality of accounting information in financial accounting reports.It has existed in accounting theory and practice for a long time and plays an important role in accounting measurement standards.Based on the research results of accounting conservatism model by Basu(1997),it is shown that the response of profit to the increase of stock return rate(i.e.good news)is lower than that of the decrease of stock return rate(i.e.bad news),that is,the response of profit to gains and losses is asymmetric.Throughout the domestic and international literature on cost stickiness and accounting conservatism,there are abundant theoretical and empirical studies on both.However,is the accounting conservatism of Chinese enterprises affected by cost stickiness?China's listed manufacturing companies may have more significant robustness and cost stickiness,so is the impact of cost stickiness on accounting conservatism more typical?At present,there are few domestic studies on such issues.Based on the above background,this paper expounds the basic theories of expense stickiness and accounting conservatism,as well as the reasons why there are two kinds of phenomena in China's listed manufacturing companies,and further analyzes the internal mechanism of the influence of expense stickiness on accounting conservatism.In order to analyze and confirm the hypothesis proposed in this paper,this paper selected the data of listed manufacturing companies in China from 2014 to 2017 as the research sample,and removed the relevant data that may affect the accuracy of the research conclusion for empirical analysis.Firstly,the surplus of stock returns inverse regression model prototype of Basil(1997)is used to prove the existence of accounting conservatism in Chinese manufacturing listed companies.Secondly,using the rate of cost difference method that Anderson et al.(2007)proposed,respectively,from the angle of the period charge,recurrent operating expenses and comprehensive operating expensesof three important types to prove the cost viscosity significantly influence on accounting conservatism.Finally,through a variety of robustness testing,confirmed that the research conclusion of robustness.The findings of the research are beneficial to clarify the influence mechanism of enterprise expense stickiness from the perspective of earnings asymmetry,and provide effective references and corresponding Suggestions for the management of listed manufacturing companies in China to conduct cost management.