Abstract
Product market competition affects management's resource allocation and cost adjustment decisions. It also affects cost stickiness. This paper looks at the impact of product market competition on cost stickiness in different economic environments. Using quasi natural experiment and the samples in Chinese capital market, this paper analyzes and tests these questions. We conclude that (1) in emerging markets, product market competition reduces cost stickiness. (2) For enterprises with differentiation strategy, the impact of product market competition on cost stickiness is not significantly weakened. (3) For enterprises with state‐owned property rights, the impact of product market competition on cost stickiness is significantly weakened. In addition, financial strength and industry competitive position also weak the impact of product market competition on cost stickiness.
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