Manager's Characteristics,R&D Investment And Cost Stickiness

With the rapid development of global economic integration,the price of domestic factors of production keeps rising,and enterprises are facing more and more cost pressure.Cost is the lifeblood of enterprise development.Cost management is also the core of an enterprise to deal with market competition and strengthen the production management.Meanwhile,it is also the most concerned aspect of managers and stakeholders.Effective cost management can not only save resources and improve profitability,but also help enterprises to implement cost leadership strategy and gain price advantage in the fierce market competition.According to the traditional theory,the relationship between cost and business volume is linear.However,existing studies have found that when business volume increases to a certain extent,the change range of cost is larger than that when business volume decreases to a certain extent,that is,both cost and business volume are asymmetric.This phenomenon is called "Cost Stickiness" in academia.The emergence of "cost sticky" phenomenon has broken the symmetry between the change range of cost and business under the traditional cost state theory.The study of the existence of cost stickiness and its influencing factors is of great significance for Chinese listed companies to improve performance level,improve cost management system and enhance economic benefits.At present,our country advocates the implementation of the innovation driven strategy,and has promulgated policies and regulations for encouraging enterprises to carry out R&D in many aspects.At the same time,as a new system of economy,the knowledge economy has attracted more and more attention from all over the world.In order to keep abreast of the trend of the times and the call of national policies,the listed companies in China also pay more and more attention to R&D.However,innovation investment will inevitably bring about an increase in costs.When enterprises invest in new products,they will generate a large number of proprietary resources that can not be sold or transferred independently,such as patent rights,R&D personnel,and so on.Besides,in a long-term strategic point of view,the continuous pursuit of product innovation will attract new customers on the basis of maintaining the existing customers,so that the market share will be expanded and the value of the enterprise will be increased.When the income rises,the managers will increase the investment in order to gain greater enterprise value.When the income falls,the managers may make the decision that does not reduce the cost in the short term,and expect the lagging profit effect after the product is put into the market.It can be seen that there is a big adjustment cost in R&D,and it may strengthen the Cost Stickiness of enterprises.When the business is decreasing,if the managers can not increase the business or reduce the cost in the short term,the long-term high cost pressure will make the enterprise fail to make ends meet,which is not conducive to the realization of the profit goal.Managers' decisions are crucial to the intensity of R&D investment and directly affect the quality of cost management.Because of the different characteristics of managers' age,education and tenure,different decisions will be made for enterprises to cut costs and how to carry out cost management.Therefore,this paper will study whether R&D investment will enhance the Cost Stickiness of enterprises.Moreover,does the difference of managers' characteristics play a moderating role in the relationship between R&D investment and Cost Stickiness?The research content of this paper includes six parts.The first part is the introduction.This part mainly expounds the research background,significance,research content,research methods and innovation points of this paper.The second part is literature review.This part mainly reviews and summarizes the relevant literature at home and abroad,and reviews the research conclusions of previous scholars.The third part is theoretical analysis and research hypothesis.This part elaborates the principal-agent theory,technological innovation theory and executive gradient theory,and combines with relevant scholars to analyze the research,and then puts forward three research hypotheses of this paper.The fourth part is research design.This part first elaborates the measurement method of the key variables involved in this paper.On this basis,it combines the hypothesis of this paper and designs the corresponding model for the hypothesis of this paper by referring to the previous research.At the same time,it defines the selection interval of the sample.The fifth part is the empirical test.Based on the data of a-share listed companies in Shanghai and Shenzhen from 2007 to 2016,this paper first analyzed the relationship between major variables through descriptive statistics and correlation analysis.Then,through regression analysis of sample data,the existence of cost stickiness of listed companies,the relationship between R&D investment and cost stickiness,and the adjustment effect of manager characteristics on the relationship between them were verified.Finally,the robustness test was carried out to verify the conclusions of this paper again.The sixth part is the research conclusions and policy suggestions.The research conclusions of this paper are as follows:(1)There is cost stickiness in listed companies.(2)The higher the R&D investment,the more viscous the cost stickiness.(3)The characteristics of managers play a moderating role on the effect of R&D investment.In the case of R&D investment,how to improve the level of enterprise cost management,this paper puts forward the following Suggestions:(1)Evaluate the cost stickiness scientifically and Improve the level of the cost management;(2)Fully understand the R&D projects and Ensure the quality of R&D investment;(3)Strengthen the management team construction and Improve the internal governance structure;(4)Optimize the recruitment process and Strengthen the construction of human resources.