Macroeconomic Cycle,Cost Structure,and Operating Performance

The demand shock accompanying economic structural transformation has a great impact on the profitability of China’s real economy,and the macroeconomic downturn brought about by COVID-19 also has a great negative impact on the operating performance of enterprises.Therefore,in the context of macroeconomic cycle fluctuations,enterprises urgently need new management ideas and constructive practical thinking that can alleviate macroeconomic fluctuation.In such an environment,enterprises should not place all their hopes on uncontrollable approaches,but should focus on the cost management that can be controlled by themselves,so as to alleviate the external macroeconomic impact from the perspective of cost structure adjustment.This paper first examines whether there is a "pro-cyclical effect" in operating performance,then uses the quarterly data of Chinese listed companies from 2007 to 2020 to measure the cost structure of enterprises,and uses theoretical models and empirical tests to systematically investigate whether the cost structure can weaken the "pro-cyclical effect" of operating performance to maintain the relative stability of operating performance.And,this paper performs group regression respectively according to the industry periodicity and the external support degree to test the role of cost structure.Furthermore,this study analyzes the moderating effect of cost structure according to enterprise expenditure categories,and finds out the expense category with the largest "buffer" effect,so as to facilitate enterprises to alleviate the macroeconomic cycle fluctuation more accurately.Finally,the 2008 financial crisis is taken as an exogenous shock event,and a series of other robustness tests are carried out.Research results show that the elastic cost structure can effectively alleviate the "procyclical effect" of operating performance,and the "buffer" effect is more prominent for enterprises in cyclical industries and low external support degree enterprises.At the same time,compared with other costs of enterprises,sales expenses play a more significant role in alleviating macroeconomic cycle fluctuations.Enterprises should focus on managing sales expenses when alleviating macroeconomic cycle fluctuations.This paper embeds the cost structure in the macro and micro research framework,which expands the scope of application and explanatory ability of the research framework,analyzes the role of cost structure in alleviating the external macroeconomic impact on enterprises from a new research perspective,and enriches the relevant literature on the economic consequences of cost structure.The findings of this paper provide a constructive practical reference for enterprises firms to cope with the external impact caused by the current outbreak of COVID19 through cost structure adjustment.