Subjects
-Tags
علوم المحاسبة وإدارة الأعمال
Abstract
Abstract
This study investigates the relationship between managerial incentives to earnings management and cost stickiness. I argue that when managers have incentives to earnings management, they tend to increase costs less for an increase in sales and to aggressively cut resources for a decrease in sales and thus cost stickiness decreases. Three proxies are used for management incentives to earnings management; namely management incentive to avoid loss, incentive to avoid earning decrease, and incentive to avoid loss and/ or earning decrease. A sample of 940 firm-year observations of non-financial firms listed in the Egyptian Stock Exchange from 2011 to 2017 is used. The results support my hypotheses and I find that when managers have incentive to manage earnings, costs exhibit an anti-sticky behavior. These results shed light on the role of motivations underlying managerial decisions in affecting firms' cost behavior.
DOI
10.21608/zcom.2020.132851
Keywords
Keywords: Cost stickiness, cost anti-stickiness, Cost Behavior, earnings management incentives, accruals constraints, real activity management
Authors
MiddleName
-Affiliation
قسم المحاسبة، کلية التجارة، جامعة الزقازيق، مصر
Email
-Orcid
-Link
https://zcom.journals.ekb.eg/article_132851.html
Detail API
https://zcom.journals.ekb.eg/service?article_code=132851
Type
تجاریة کل ما یتعلق بالعلوم التجاریة
Publication Title
مجلة البحوث التجارية
Publication Link
https://zcom.journals.ekb.eg/
MainTitle
The relationship between earning management incentives and cost stickiness: Empirical evidence Egypt