The Empirical Research On The Earnings Management And The Cost Stickiness Of Our List Companies

Recently, the rise of cost stickiness research suggests that the variation between cost and revenue is asymmetric, especially the costs fall is limited associate with the decrease of revenue. The cost stickiness phenomenon is commonly existent, which objectively demands that managers respect and understand cost objective laws with a new outlooks and perspectives so they can guide the cost management of enterprise effectively. Although a great deal of domestic and international researches and experiences has shown that enterprise cost there are stickiness problems, a crucial issue has been ignored:The listed companies carry out earnings management in order to reach the organizational goals because of the special entrance requirements and supervising rules in our country, like issue shares, reverses losses, insider trading, market manipulation and so on. The enterprise cost can be adjusted to achieve a certain profitability by real and accrued earnings management. The deliberate adjustment of cost might overstate or understate the cost stickiness of enterprise. Then their estimate of cost stickiness based on classical model might be influenced by earnings management.This article has straightened out and commented the relevant literature of cost stickiness and earnings management, on the basic of which the research assumptions of this dissertation are derived, then the further research subsequently. From the overall viewpoint of our listed companies, through the study of cost stickiness, it empirically analyzes data from1063listed companies of Shanghai and Shenzhen A shares investigate the existence and reversal of cost stickiness in our listed companies, analyze the influence of cost stickiness by opportunism from manager perspective. The research result shows that earnings management motive have a significant impact on cost stickiness of overall listed companies. After eliminating the samples of "big bath" and turnaround motivation, the total cost of our A-Stock listed companies have no stickiness and the cost stickiness have no reversal, but have stickiness and little decrease in SG&A cost, the SG&A stickiness show reversal over time.This paper research on the cost stickiness of enterprise from the angle of earnings management. It could lead to a better understanding of nature and state of cost for manager. The manager could more accurately predict movement of cost and make more correct management decision to improve business performance.