Research On The Effect Of Cost Stickiness On The Risk Of Cash Flow

The value chain of enterprise production determines that cost management serves for the inflow of cash and the increase of profit.The most important principle of cost management is to obtain and accumulate resources,and then rationally configure and operate resources according to the enterprise management plan,so that the enterprise will have sustained and steady growth(Zhang et al.,2005).For the enterprise itself,any measures to prevent cash flow risk must eventually be implemented into the specific cost decision.How to carry out cost management according to the complex situational requirements of enterprises has become a problem that entrepreneurs and management accounting scholars have been exploring.Asymmetric cost behavior is the result of enterprise's intertemporal cost decision.According to the theory of asymmetric cost behavior,cost stickiness is a performance that increases or keeps the cost of resource inputs.Cost stickiness may reduce the performance of the current enterprise accrual system,but also can maintain the structural cost,contract and customer viscosity effect,avoid the opportunity loss caused by efficiency,structure and contract adjustment,to stabilize the original operation strategy or contract relationship in the sales fluctuations,and ultimately ensure sustained and stable cash flows.This paper is based on the view of "cost stickiness usefulness",combined with previous research results,using the combination of empirical and normative research methods.It first studies the relationship between cost stickiness and cash flow risk,and distinguishes the difference effect of cash flow risk inhibiting effect of cost stickiness between state-owned enterprises and non-state-owned enterprises.Then introduce the managers ability variables,attempts to clarify the relationship of Management ability,cost stickiness and corporate cash flow risk,to provide evidence for the value of cost stickiness.This paper takes the disclosure data of manufacturing listed companies in China from 2010 to 2014 as the research sample,then collects the data and establishes the relevant model to test the hypothesis.The research finds that: First,cost stickiness can restrain the risk of cash flow.This shows that cost stickiness is the result of enterprise's active cost planning,and the existence of cost stickiness has long-term and strategicsignificance.Second,the effect of cost stickiness on controlling cash flow risk is more significant in non-state-owned enterprises.The current cost stickiness of state-owned enterprises has less influence on the degree of cash inflow and the fluctuation of cash flow than non-state-owned enterprises,which is due to the characteristics of the "state publicity" of state-owned enterprises.Third,the ability of managers in non-state-owned enterprises can improve the effect of cost stickiness on cash flow risk reduction.The higher the managers' ability,the better the effect of cost stickiness.This shows that the cost stickiness is not the bigger the better,smart managers are good at using moderate cost stickiness to stabilize the cross phase cash flow.The study also found that the management of state-owned enterprises and non-state-owned enterprises have different preferences of cash flow risk.The managers with high ability in state-owned enterprises tend to avoid the risk of cash flow,and the managers with high ability tend to bear the cash flow risk in non-state-owned enterprises.This is due to the different management incentives and responsibility decisions of state-owned and non-state-owned enterprises.This paper makes a further study of the relationship of cost stickiness and the customer concentration rate,found the cost stickiness inhibition of customer concentration changes,to maintain the stable customer relationship,this conclusion reinforces the assumption that the cost stickiness ensures the stability of cash flow through maintaining the stability of customer contract relationship and so on.Generally speaking,the research of this paper has important theoretical and practical significance for understanding the usefulness of cost stickiness.The enlightenment is that: First,we should have a correct understanding of the role of cost stickiness,cost stickiness is not waste and redundancy of resources,but the performance of cost management to maintain contractual relations and operating efficiency.Secondly,more attention should be paid to the cultivation of managers' ability and the management of cash flow risk,which is the key to the sustainable development of enterprises.