Managerial Overconfidence?internal Control And Cost Stickiness

As China 's economy has gradually entered the “new normal” and the impact of US trade policy on China 's manufacturing industry,the issue of cost has become an important issue for enterprises.At the same time,when enterprises face the complicated environment at home and abroad,they put forward higher requirements on the internal control level of the enterprise.Different from the traditional rational economic person hypothesis,the manager's psychological and behavioral patterns run through the entire internal control behavior of the enterprise.Under the influence of the two power separation system,the differences in the characteristics of managers' personal characteristics are more prominent in corporate governance.Management's decisionmaking has played a very important role in the development of the company.Existing research has found that managers' behavioral motivation is to pursue their own interests.After they realize their self-interest,they are more inclined to chase honor and status.At the same time,the incentives obtained are beneficial to the implementation of internal control.In traditional cost behavior theory,there is a symmetrical relationship between cost and business volume.With further research,it is found that there is an asymmetry between cost and business volume,which results in cost stickiness.The irrational overconfidence of executives can exacerbate the cost stickiness.The current literature research finds that the excessive self-confidence of managers will exacerbate the degree of cost stickiness.At the same time,the increase in the degree of internal control will alleviate the degree of cost stickiness.Relationship between people.This article breaks the boundaries of traditional corporate governance research and delves into the mechanism of internal control and managerial overconfidence on cost stickiness.Based on a review of the relevant literature on managerial overconfidence and cost stickiness,this paper uses Shanghai and Shenzhen A-share manufacturing companies as a sample from 2014 to 2017 to test the quality of internal control,managerial overconfidence and cost stickiness through multiple regression analysis.The relationship between the three.Studies show that managers' overconfidence will increase the degree of cost stickiness of enterprises.At the same time,compared to state-owned enterprises,the positive relationship between overconfidence and cost stickiness in non-state-owned enterprises is more obvious;companies with higher internal control quality have higher costs.The lighter the degree of stickiness.After further exploring the relationship between internal control,manager's overconfidence,and cost stickiness,it is concluded that compared with companies with poor internal control quality,managers with strong internal control quality have overconfidence and cost stickiness.The positive correlation was weak.This article makes recommendations from the perspective of executive behavior and internal control.