Abstract
China market economy is in a new period of structural deceleration. Factors, such as fierce external competition and the advancement of the globalization process have put Chinese companies under enormous development pressure. Cost management is very important for improving the utilization rate of resources, the core competitiveness of an enterprise, and achieving the net profit target set by the enterprise. The basis study of cost management is the cost form. After the stickiness of costs is proposed, it has been widely concerned by academia and practice. Managers are the decision-makers of business activities and internal information disclosure. The current shareholding structure of the Chinese government’s macro-control has formed an “insider control” phenomenon, which highlights the importance of managers. Overconfidence of the managers can strongly impact on the manager’s decision-making. Based on this, it is of great significance to study the influence of managers’ overconfidence on the cost stickiness. This paper uses the data of Shanghai and Shenzhen A shares manufacturing companies from 2014 to 2018 to verify the existence of cost stickiness, and then studies the influence of managers’ overconfidence on the cost stickiness. The study found that there is a phenomenon of cost stickiness in listed companies in China’s manufacturing industry. More over, managers’ overconfidence can aggravate the problem of cost stickiness of enterprises. The innovation of the research is as following. Firstly, it enriches the research perspective of the sticky motivation of costs. Secondly, the study extends the research of managers’ overconfidence to the field of cost decision-making.
Highlights
China market economy is in a new period of structural deceleration
Strengthening cost management and improving the efficiency of resource allocation are conducive to improving the company's core competitiveness
Compared with traditional cost patterns, cost stickiness is not symmetrical, that is, the marginal decrease in expenses when the business volume decreases is less than the marginal increase in expenses when the business volume increases [1]
Summary
China market economy is in a new period of structural deceleration. Chinese enterprises are facing tremendous pressure for survival and development under the fierce external competition. With the continuous deepening of cost research, the study of the phenomenon of cost stickiness has arouse wide concern in academia and practice. The research on cost stickiness mainly focuses on its influencing factors and motivations. It is necessary to study cost management from the perspective of enterprise managers. It is of practical significance to study the influence of managers' overconfidence on the stickiness of corporate expenses. The research significance of this article is mainly as follows For the motivation of building: Firstly, it theoretically enriches the research perspective of cost stickiness drivers, and extends the research of managers' overconfidence to the field of cost decision-making. NETID 2020 sense, it helps strengthen the cost management of the enterprise, and helps remind managers to avoid overconfident decision-making mistakes
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