Asymmetric Cost Behavior and Investment in R&amp;D: Evidence from China’s Manufacturing Listed Companies

Sun, Renji; Ho, Kung‐Cheng; Gu, Yan; Chen, Chang-Chih

doi:10.3390/su11061785

Cited by 11 publications

(13 citation statements)

References 43 publications

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“…*, **, *** indicate significance at 10%, 5%, and 1% levels, respectively, in two-tailed tests. We regress Model (5) with the the logarithmic change in SA&G costs as dependent variables using fixed effects regressions.…”

Section: Resultsmentioning

confidence: 99%

“…However, recent empirical research demonstrates asymmetry in cost behavior -in other words, that costs increase more rapidly with activities than they decrease -which has been termed "cost stickiness" [3]. Recent studies have examined asymmetric cost behavior as a function of managerial deliberate cost adjustment [3][4][5], managerial optimism or pessimism [6], earnings management incentives [7,8], agency problem [9], earnings forecasts [10], capacity utilization [11], unemployment [12], product market competition [13], corporate social responsibility [14], conservatism [15], and whether or not the costs are related to the core operations of a firm [16].…”

Section: Introductionmentioning

confidence: 99%

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Business Strategy, State-Owned Equity and Cost Stickiness: Evidence from Chinese Firms

et al. 2020

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This paper investigates the relationship between business strategy and cost stickiness under different ownership. Using the data from listed firms in China from 2002 to 2015, we find that first, firms with different strategies exhibit different cost behavior. The cost stickiness of choosing a differentiation strategy is higher than that of choosing a low-cost strategy. Second, management expectations will affect cost stickiness. Optimistic expectations will increase cost stickiness, while pessimistic expectations will reduce cost stickiness. Third, management expectations can adjust the relationship between business strategy and cost stickiness in terms of government-created advantages (GCAs). If management expectations tend to be optimistic, the cost stickiness is higher with a differentiation strategy than with a low-cost strategy. If management expectations tend to be pessimistic, then cost stickiness is higher with a low-cost strategy than with a differentiation strategy. Finally, the state-owned equity affects the extent of the effect of a differentiation strategy on cost stickiness. State-owned firms, which receive more GCAs than non-state-owned firms, have stronger cost stickiness than non-state-owned firms, even if both categories of firms use more differentiation strategy.

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Business Strategy, State-Owned Equity and Cost Stickiness: Evidence from Chinese Firms

et al. 2020

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“…Therefore, it has become a duty for managers and accountants to pay attention to studying this relationship and tracking the behavior of costs, based on the fact that understanding the motive behavior of costs towards a change in the level of activity provides evidence of the correctness of decision-making, including budget decisions (Abu-Serdaneh, 2014). A new phenomenon has emerged in which costs increase more when sales increase than decrease when sales decrease by a similar amount and this behavior was known as asymmetric behavior of costs (Sun et al, 2019). This raises questions about the perception and understanding of those involved in asymmetric costs behavior and is expressed as sticky costs.…”

Section: Problem Statementmentioning

confidence: 99%

Recognize the Sticky Costs Behavior

Rahahle¹

2021

IJARAFMS

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The study aimed to identify the level of the accountants' awareness of the concepts and nature of the phenomenon of asymmetric costs and its sticky behavior, and to reveal the causes and factors that lead to its occurrence, and to propose solutions to avoid it. The study followed the descriptive and analytical approach, study population consisted of (56) companies that include Jordanian industrial companies listed on the Amman Stock Exchange. The questionnaire was used to collect primary data; the numbers of the questionnaires that are retrieved and valid for analysis were ( 168). The study found that there is a medium degree of awareness, understanding and knowledge of the concepts and merits' frameworks of the sticky and asymmetric costs phenomenon in a medium degree, furthermore, there is a high degree of awareness for the causes and factors that lead to the existence of a sticky behavior case and asymmetric costs, and that there is an awareness of the appropriate solutions that have been proposed, which through it, we can avoid sticky behavior of costs in a moderate degree. The study recommended holding courses and workshops on sticky costs for stakeholders whose work nature requires knowledge and understanding of the rationale for sticky cost behavior, with the aim of enhancing their awareness and serving the corporate goals. And that companies analyze the reasons for the sticky behavior of costs and their asymmetric, as well as study the proposed solutions, and review their policies and regulations related to controlling the relationship between owners and managers, in order to reduce cases of conflict of interest, and benefit from the expertise of legal advisors related to the organization of labor, following appropriate policies in the acquisition of fixed assets and stock.

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“…Bunlara ek olarak, gelecek talepteki belirsizlikler ve kapasitenin altında faaliyette bulunan firmalarda maliyet yapışkanlığı artarken, kapasitenin üstünde faaliyette bulunan firmalarda maliyet yapışkanlığı azalmaktadır (Sun, Ho, Gu, & Chen, 2019: 3)few have investigated its economic consequences. This paper empirically examines how firms' asymmetric behavior influences their research and development (R&D (Subramaniam & Watson, 2016:134).…”

Section: Introductionunclassified

BİST İmalat Sektöründe Yer Alan İşletmelerde Maliyet Yapışkanlığının İncelenmesi

Horasan¹,

Ağ²,

Yılmaz³

2020

Maliye Finans Yazıları

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This study aims to examine cost stickiness between sales and sales costs and operating expenses in BIST manufacturing sector enterprises. 176 manufacturing companies were tested in four different models in three groups as small, large and one whole. The annual data of the companies for the period of 2010-2018 were analyzed in the SPSS statistics program. According to the findings obtained, while cost adhesiveness is not determined between Sales and Cost of Sales in one and two years period, it is determined that the costs are sticky in both periods and in all enterprises between Sales and Operating Expenses.

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Asymmetric Cost Behavior and Investment in R&D: Evidence from China’s Manufacturing Listed Companies

Cited by 11 publications

References 43 publications

Business Strategy, State-Owned Equity and Cost Stickiness: Evidence from Chinese Firms

Business Strategy, State-Owned Equity and Cost Stickiness: Evidence from Chinese Firms

Recognize the Sticky Costs Behavior

BİST İmalat Sektöründe Yer Alan İşletmelerde Maliyet Yapışkanlığının İncelenmesi

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