An Empirical Study On Cost Stickiness And Firm Performance

Cost management is an important part in enterprise daily management, at the same time,it is one of the important factors when managers make the economic decisions. The traditional theory consider that there is a linear relation between cost and volume, the marginal rate of cost has nothing to do with the change of business direction. in recent years, Scholars found that the existence of the cost sticky, confirmed the cost and volume changes are asymmetric. Universal existence of cost stickiness ask for people in practice with a new perspective to understand the cost changes.In the first, This paper combed the domestic and foreign research related to cost stickiness, on the basis of summarizing the domestic and foreign outstanding research, I found that there are few scholars study the economic consequences of cost stickiness, especially the effect of cost stickiness on business performance. So this paper makes a new exploration in the following aspects:(1) To find how the cost stickiness affect long-term performance and short-term performance in use of the Weiss model.(2) To find how the anti-cost stickiness effect the enterprise short-term.This article selects manufacturing industry from 2007-2013 year as sample, all the data are from CSMAR database. The conclusions are as follows:(1)Cost stickiness and anti-cost stickiness at the same time exist in manufacturing industry. In comparison, the cost stickiness is more prominent. The conclusion supports the predecessors’ research concerning the cost stickiness exist in manufacturing industry.(2)In manufacturing industry, cost stickiness and short-term enterprise performance has negative correlation.(3) In manufacturing industry, anti-cost stickiness and short-term enterprise performance has positive correlation.(4)The relationship between cost stickiness and long-term enterprise performance present has positive correlation. In the end, this paper puts forward the corresponding countermeasures.