An Empirical Research Of Cost Stickiness And Its Impact Factors Among Listed Companies In China

Cost management has always been an important aspect of business management. The research on cost stickiness can give us a better understanding of the real situation of corporate costs, while the relevant accounting information can also reflect the managerial behaviors of cost management. In the current economic environment, gaining insight into the degree and impact factors of Chinese enterprises’ cost stickiness is very significant.In this essay the author examines the existence and degree of listed companies’ cost stickiness in the current economic environment background firstly. Using a sample of508Chinese A-share listed companies from2008-2012, we find the cost stickiness is existing and weaker than prior periods. And the SG&A have the strongest stickiness, total costs come second, and operation costs tend to be the least sticky. Then by using the principal-agent theory, transaction cost theory and the contract theory, the author induces two dimensions of impact factors namely the adjustment cost and managerial behaviors. Findings indicate that operating costs stickiness is more affected by the objective factors, including industry factors, market volatility factors and marketization degree of production factors; while the SG&A stickiness is more affected by the managerial behaviors, including managers operating efficiency, managers optimistic expectations and opportunistic motives of managers. At last, according to the controllable and uncontrollable impact factors, the author reminds the managers properly focusing on the influence of cost stickiness on the financial forecasting and decision, and to take different measures to control the operation cost and SG&A.