Abstract
Managers are important human capital of firms and their personal characteristics can have direct and significant effects on firms’ decision behaviour and value creation. This paper explores this issue from the perspective of cost stickiness, using data from manufacturing firms listed on the Shanghai and Shenzhen Stock Exchanges of China over the period 1999 to 2011. The results are the following. (1) The gender and age of a chairperson can significantly affect a firm’s cost stickiness. Firms with a male chairperson or a young chairperson tend to have higher cost stickiness. However, the chairperson’s tenure does not significantly affect cost stickiness. (2) The degree of bank supervision may influence the relationship between gender/age and cost stickiness. When the degree of bank supervision is high, a chairperson’s personal characteristics do not significantly affect a firm’s cost stickiness. (3) The impact of a chairperson’s personal characteristics and bank supervision on a firm’s cost stickiness is reflected mainly in non-labour costs. Further tests show that long-term and short-term bank loans, as well as bank loans for state-owned and non-state-owned listed firms, have good supervision effects. Overall, these results show that managers’ personal characteristics and bank supervision have an important impact on their firms’ cost behaviour.
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* This paper is the result of periodic research supported by the National Science Foundation of China (71402198, 71502183), the Social Science Foundation of Beijing (15JGC176), the China Postdoctoral Foundation (2015M580314), and the “121 Talent Project Youth Ph.D. Development Fund” (QBJ1413). We thank the “Joint Construction Project” and the “Pilot Reform of Accounting Discipline Clustering” of the Beijing Municipal Commission of Education, and the “Program for Innovation Research” of the Central University of Finance and Economics. We thank the participants of the 12th (2013) International Symposium on Empirical Accounting Research in China. We also appreciate the very helpful comments from Prof. Huayun Zhai and the suggestions made by the anonymous referee. We take full responsibility for this paper.
1 PhD, China Management Accounting Research and Development Center/School of Accountancy, Central University of Finance and Economics.
2 PhD, School of Accountancy, Shanghai University of Finance and Economics/School of Business, Changzhou University. Corresponding author. Address: 777 Guoding Road, Shanghai (200433). Email address: Zhaogang0517@126.com.
3 PhD, School of Finance, Nanjing Agricultural University.
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Liang, S., Zhao, G. & Wang, N. Managers’ Personal Characteristics, Bank Supervision, and Cost Stickiness *. China Account Financ Rev 17, 11 (2015). https://doi.org/10.7603/s40570-015-0011-0
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DOI: https://doi.org/10.7603/s40570-015-0011-0