Industry Boom And Cost Stickiness

With further development of economic reform,our economy has entered a new normal period with steady growth.Unlike the extensive growth period of "high energy consumption,high pollution and low efficiency," the pattern of economic growth in our country has been gradually changing during the new normal state,which is the intensive growth period of "low energy consumption,low pollution,high efficiency".Nowadays,the economic structure is constantly improved and upgraded Besides,Emerging industries get rapid development.The economic environment and the industrial environment have undergone important changes to the individual enterprises.There are challenges in this transition,both traditional industries Individuals or the emerging industries Individuals should keep pace with the times so as to the face the challenges they would face and grasp the opportunities in the changing environment.The industry environment of traditional enterprises is gradually changing,which inflect in the aspects of lower industry attention,lower tax incentives and many restricting rules.In order to survive and get further development,the traditional enterprises must improve and upgrade the business structure.In this time,it is necessary to do a good job in the part of cost control to tide over a crisis of the enterprise.However,the environment of emerging industries enterprises is different from those traditional enterprises,which is more positive and preferential.The boom of the industry brings its advantages such as attention,policy guidance and market activity.It is necessary for enterprises to formulate the development strategy in combination with their own condition when the enterprise in actively expanding period and to establish corresponding cost management mechanisms to support the cash flow management.Therefore,enterprises should pay attention to the changes in the environment where they are,so as to control the cost well,while cost control needs to be accurate and in-depth understanding of the cost behavior.In the traditional theory of cost management,the cost behavior model is linearly.The cost and expense is only related to the degree of change of business volume,and has nothing to do with the change of business volume.However,many scholars have found through empirical data that the direction of business volume changes will affect the cost behaviour and with the positive changes in business costs than the cost of negative changes in costs and there is a phenomenon common in listed companies which we called cost sticky.This research continues to challenge the traditional management accounting theory.At present,studies on cost stickiness have mushroomed,basically considering the adjustment cost,agency problem and managers' expectation as the three major causes of firm cost stickiness.However,the related researches are still immature in terms of depth and width,which are mainly reflected in the fact that there are many literatures on the existence and factors of research,and few conductive paths and economic consequences.This article inspired by the interaction framework of the macroscopic environment between enterprises.It is based on the managers' expectation of this intermediary perspective to analyzes the relationship of industry boom and cost stickiness,which enriches the research of cost stickiness,but also analyze the transmission channels of the mid-range factor of the industry environment acts on the micro-enterprise behavior.On the one hand,it provides the corresponding theoretical basis for the government to develop macro-economy,formulate industrial policies,regulate micro-enterprise behaviors,and on the other hand,for the enterprise to accurately control the cost performance of enterprises,and formulate different cost strategies while understanding the existing mid-term environment.It has important theoretical and practical significance.In this paper,we choose the A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2009 to 2016 for the empirical test.It is found that the industry boom has positively affect on the firm's cost-sticky behavior,that is to say the better industry prospect of the enterprise is,the higher level of cost sticky will be.At the same time,another conclusion has been found that the boom of the industry environment has a comprehensive impact on the cost-stick behavior and it is manager's expectation channel that play an mediated role in the relation of industry boom and firm's cost-sticky behavior.Based on this conclusion,the corresponding policy recommendations are drawn that the government departments should standardize and adjust the medium-sized environment according to the output of the micro-enterprises,and enterprises should design more reasonable research and decision-making mechanisms to enhance the capacity of managers and conduct more scientific objective and effective decision-making.The innovations of this paper are as follows: firstly,it expands the research on the microcosmic behavior of firms at the industry level,from another perspective to observing the daily business activities of the firm.Beside it provides a model for studying industry environment acts on enterprises activities.Secondly,few scholars will study the impact of the concept of environment on firm cost stickiness in the industry.This study explores the influencing factors and expands the study of the path at the same time to provide evidence for the establishment of a new cost model.Finally it offsets the shortcomings that there is less empirical quantification of managers expected at the present stage.So it enriches the relevant research of managers' behaviors and prove the feasibility of interdisciplinary study of behavioral psychology and management science.