The Research On Executive Pay, Ownership Concentration And "Cost Stickiness"

In the long-term development, Management Accounting takes the cost behavior assumption as its basic theory, which assumes a strict linear relationship between cost and volume. But after a number of studies of scholars both at home and abroad, the relationship between cost and volume is not linear. When the volume increases, cost increases more than it decreases when the volume decreases, that is cost stickiness. The concept of stickiness opens a new door for Management Accounting. More and more scholars begin to study cost stickiness, from many areas like its existence, reason of its generation, features, economic consequences, and so on. However, there are some people who question stickiness on the way of choosing samples and they believe the level of cost stickiness may be overestimated. Based on these views, this article studies cost stickiness of our manufacturing listed companies, taking the implementation of the current accounting standards in2007and the occurrence of financial crisis in2008for opportunities. This paper analysis if the cost stickiness exists and significant and if it has decreased based on the financial data from2007to2012. What is more, this paper studies the relationship between agent problems (from the perspective of executive pay and ownership concentration) and cost stickiness. During the study, I use different way to choose samples based on contradicts.Chapter one introduces the backgrounds, significance, contribution, review of literatures of the research, and the structure arrangement, way of study. Chapter two shows some theoretical analysis. Chapter three elaborates the empirical study design (includes build hypothesis, model and defines variables). Chapter four lists the empirical results of this paper. Chapter five shows the conclusion and some relevant policy implications, including conclusions, policy implications, contribution, shortages and prospect of the research.Conclusions are as follows. Firstly, before stripping out samples that cost change rate is different from sales rate, general administrative and selling expenses and cost of goods sold of our manufacturing listed companies show the feature of stickiness significantly from2007,which less than that of years before2007,and stickiness level in general administrative and selling expenses is more than that in cost of goods sold. Secondly, after stripping out samples that cost change rate is different from sales rate, conclusions as above change. The general administrative and selling expenses do not show the feature of stickiness and stickiness in cost of goods sold decrease. Thirdly, before stripping out samples, stickiness in both general administrative and selling expenses and cost of goods sold varies directly with executive pay and ownership concentration. However, after that, only cost of goods sold varies directly with executive pay and ownership concentration.The main contributions are as follows:(1)Study stickiness from2007in general administrative and selling expenses and cost of goods sold separately, which shows that the implement of current accounting standards and management pessimism because of economic crisis could decrease cost stickiness.(2)Make research on different ways of choosing samples and conclude the way of choosing samples does affect the research.(3) Study how the executive pay and ownership concentration which represent agent problems affect stickiness and the conclusion is negative correlation. This paper enriches the large sample research of the relationship between management opportunism and cost stickiness. Some shortages in this paper:(1)The article use data of Guotai Junan database and the data may has the problem of low quality, which could affect conclusions of the paper.(2)Confirm confute only from the way of choosing samples but not from the way of building models and if I modify model, this paper may make new discoveries.(3)There are many factors which affect cost stickiness and this paper only chose executive pay and ownership concentration as variables. If I can consider various factors, it may be more explainable for stickiness. Although these shortages above, I still believe that this paper can provide some help for understanding stickiness correctly.