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| Performance Examination, Managerial Overconfidence and Cost Stickiness |
| LIU Chang,YANG Xingquan,LI Lixin |
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Abstract Using the data of A-share listed companies from 2007-2011 in China, we first study the relationship between the managerial overconfidence and costs stickiness from the psychological point based on the performance appraisal system in China. The empirical results show the managerial overconfidence is significantly negative with the firms’ costs stickiness, which attributed to the overconfidence on their own cost-control behavior and its negotiate ability, and the cost-reduction behavior. The futrher studies show the negative relation is more significant in the state-owned listed companies owing to the closer relation between the remuneration, Promotion and the performance in the state-listed companies. This paper deepens the motivation explanation of the costs stickiness based on psychological perspective, enriches the academic research on costs stickiness &managerial overconfidence, and contributes to evaluating the effect of the performance appraisal system in China.
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Received: 02 May 2013
Published: 15 March 2014
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Corresponding Authors:
LIU Chang
E-mail: 409613519@qq.com
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2014, Vol. 
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