Big Bath,Debt Constraints And Cost Stickiness

Cost Stickiness refers to the cost in business volume rise is greater than the decline the volume decreased when the magnitude of decline in matching,since the concept put forward,large number of domestic and foreign scholars put attention,it has become one of the hot topics in the field of cost management.Under the background of fierce market competition and macroeconomic downturn,cost management is a difficult problem that company managers must face.Due to more stringent security supervision system of our country,when the listed companies faced loss,in order to avoid the risk of special treatment because of losses,company managers have motivation to implement "Big Bath",that is,adjust cost level during the loss,artificially created surplus reserve space,enable enterprises to "turn around" the space for the next year,is a kind of relatively common earnings management behavior when the company faced loss.In addition,how to govern cost stickiness,most scholars discussed from the aspects of the internal corporate governance,few literature studies from the external corporate governance factors,debt constraints as an important external governance factors,it has played an important role in inhibiting the management of earnings management,thus reducing the cost stickiness of the company.Therefore,this thesis attempts to "Big Bath",debt constraints and Cost Stickiness embedded in the same theoretical framework,in-depth,systematic study.This thesis analyzes the influence of the "big bath" on cost stickiness,and incorporated debt constraint into the analytical framework,which broadens the research content of cost stickiness;and this thesis introduces the external governance factors of debt constraints,study on the regulation effect of debt on the"big bath" and the relationship of Cost Stickiness,added new evidence for debt governance.On practical value,research on cost stickiness helps to reveal the enterprise cost management of the "black box",company can make reasonable and accurate cost decisions.The structure of this thesis is as follows:The first part is the introduction.This part first introduces the background and significance of the paper,then defines the content and methods of this study,and finally points out the possible innovations.The second part is the literature review.Mainly from the cost stickiness,"Big Bath" and cost stickiness,debt constraints and the earnings management of the literature review,and review of current research,and further research on Cost Stickiness on the basis of existing research results.The third part is the theoretical basis and research hypothesis.First of all to define the concept,then introduce the basis theory which this thesis based on,and based on these theory,from the point of view of manager's management motivation"Big Bath",from theoretical to analyze " Big Bath " impact on cost stickiness,and "Big Bath "under the constraint of debt constraints,to further influence the Cost Stickiness,and put forward the hypothesis of this study.The fourth part of the research design.Firs according to the article,we select the sample,and define the variables in this paper.Then we design the model and lay the foundation for the empirical analysis..The fifth part is the empirical analysis.Descriptive statistical analysis and correlation analysis of the selected samples,and draw preliminary conclusions of the study;and then multiple regression analysis is conducted to verify the hypothesis proposed in this thesis.finally conduct the robustness of test to provide more sufficient empirical evidence.The last part is the research conclusions,policy recommendations and limitations.According to the results of empirical analysis,this thesis summarizes the main conclusions,and expounds the limitations of the thesis and makes a prospect for the follow-up study.This thesis using 2003-2014 of China's Shanghai and Shenzhen A-share listed company financial data as the study sample.Through the empirical research draw following conclusions:(1)Chinese listed companies generally have cost stickiness;(2)if the company had the behavior of "big bath" earning management,Cost Stickiness of the company will increase;(3)the above relationship exists only in the case of weak debt constraints,If the company has a strong debt constraint,the "big bath" earnings management behavior does not significantly enhance the company's cost stickiness.This thesis has three main innovation points:(1)on the basis of previous literature,this thesis directly connected "Big Bath" and Cost Stickiness,enrich the literature on the genesis of the Cost Stickiness;(2)put "Big Bath" debt constraints and Cost Stickiness embedded in a theoretical framework,broaden cost stickiness research field;(3)based on internal governance to cost stickiness,this thesis further extended to external governance mechanisms,make up the deficiency in the field of governance mechanism on cost stickiness.