Managerial Self-Interest,Cost Stickiness And Enterprise Performance

Cost stickiness has shaken the basic theoretical position of cost behavior assumptions in management accounting,forcing us to re-examine the applicability of cost behavior assumptions under new economic environment,changing the traditional cost control and management concepts,improving enterprise performance.Existing research results are mostly based on its existence,causes and factors,few scholars study on the economic consequences of cost stickiness,which causes no evidence for enterprises to control cost stickiness and improve performance under new situation.As the decision-makers of enterprise cost behavior,managers’ behavior will inevitably affects the relationship between cost stickiness and enterprise performance,therefore,improving enterprise performance by restricting the behavior of managers is a new perspective.In order to examine the relationship between cost stickiness,managerial self-interest and enterprise performance,this paper chooses the financial data of China’s A-share manufacturing listed companies from 2011 to 2015 to carry out empirical research.The empirical research conclusions are as follows:(1)cost stickiness of the listed companies in China manufacturing industry is negatively correlated with the short-term performance of the enterprise.The greater the degree of cost stickiness is,the worse the short-term performance of the enterprise behaves;(2)Inversely,cost stickiness is positively related to long-term performance of the enterprise,meaning maintaining a certain degree of stickiness level is conducive to its long-term performance;(3)the self-interest behavior of the managers further strengthens the negative correlation between cost stickiness and short-term performance of the enterprise,which is not conducive to the short-term performance of the enterprise;(4)managerial self-interest behavior weakens the positive correlation between cost stickiness and long-term performance of the enterprise.Combined with the empirical conclusions,this paper proposes giving full play to supervisory functions of the board,designing constraints and incentive contracts reasonably and other related management inspirations.Incorporating the cost stickiness causes(managerial self-interest),cost stickiness and its economic consequences(corporate performance)into the same research framework not only further broadens the scope of the research on cost stickiness,but also provides a new perspective for controlling corporate costs and improving corporate performance.In addition,another feature of this paper is using the WEISS model to calculate each year’s cost stickiness level of individual enterprise in empirical part,which overcomes the major drawback of the ABJ model.