An Empirical Analysis Of Cost Stickiness And Corporate Profitability

After the global economic crisis in 2008,the Chinese government formulated a series of measures to stimulate economic recovery and development,encourage investment in various fields,and China's economy has rapidly recovered and the scale of production in various industries has continued to expand.Within a few years,the products produced by some industries in our country have seen an oversupply in the market.In order to solve the problem of overcapacity and prevent the waste of production factors caused by over-investment,the central government has introduced a supply-side reform plan to reduce production costs and optimize the allocation of resources.Cost management is an important aspect of enterprise management.Especially in the information age,strengthening cost control has become an effective means for enterprises to gain advantages in market competition.Because the necessary costs have already occurred at the time of production,when the company's performance changes,managers take various considerations in terms of cost input,control,and adjustment.This has the potential to create costly stickiness,and cost stickiness breaks down.The traditional understanding of cost accounting in management accounting makes cost management more complex and more scientific.The current study considers that the economic consequences of cost stickiness are mainly reflected in the impact of earnings management and corporate performance,especially on corporate profits.The management and control of input costs and expenses of the current period will affect the amount of the company's next-generation costs and expenses,and thus affect the profitability of the next period.Variety.Managers will strive to increase their profitability to achieve their own self-interest by obtaining more considerations such as salary rewards or promotion opportunities.In this process,in order to manipulate profitability at a high level,it will be at a cost.Investment adjustments will result in cost stickiness.Therefore,when the business volume changes,the cost change rate will affect the changes in the company's profitability.Based on the empirical analysis of 2009-2015 data of listed companies in the manufacturing industry in China,the following conclusions are drawn:(1)There is a negative correlation between cost stickiness and profitability of listed companies in China's manufacturing industry,and weak profitability of companies with high cost stickiness.The companies with low cost stickiness have good profitability,that is,higher cost stickiness is not conducive to the improvement of profitability.(2)The company's cost-viscosity with large profit space is negatively correlated with profitability,and the company's cost stickiness with narrow profit space is positively correlated with profitability.(3)The influence of cost stickiness on profitability when the company is in the growth stage and recession stage is higher than the effect of cost stickiness on profitability when the company is in mature stage.