Empirical Test Of The Regional Differences Of The Cost Stickiness In Chinese Manufacturing Listed Companies

In traditional cost theory, costs are consist of fixed costs, variable costs and mixed costs, which are the foundation of the traditional cost model. In this model, the relationship of sale amount and costs is a simple linear relationship. Recent studies in cost behavior find that selling, general and administrative costs(SG&A)and cost of goods sold(CGS) are sticky, i.e., costs increase more with activity increases than they decrease in response to equivalent activity decreases. Deeper researches on the cost stickiness were conducted by many scholars.In this context, we focused on the regional differences of the cost Stickiness in Chinese manufacturing listed companies. We used452Chinese manufacturing listed firms as the sample, the cost stickiness as the starting point and the empirical research and comparative research as the main methods. What is included in the empirical study are the existence, characteristics, and factors of the costs stickiness among in the manufacturing listed firms in China from2001to2011, and the comparison among the sticky of different regions as the East, the Central and the West.The conclusions are as follows. Firstly, costs stickiness of different sticky levels exists in Chinese manufacturing listed firms of different regions. Secondly, over a longer accounting period, the level of the costs stickiness does not become lower. On the contrary, the level of the costs stickiness in China, especially in the West. becomes higher. Thirdly, with the aggregation of large changes of sales activity, stickiness of the costs declines. Different regions have different speeds of decline. Fourthly, macro-economic growth has reduced the degree of the sticky behavior, especially in the East and the Central. At last, we came up with the possible relevant policy recommendations of the sticky cost behavior in different regions.