Abstract Cost and expense stickiness is an important issue in accounting and economics research, and the literature has shown that cost stickiness cannot be separated from managers’ motivations. In this paper, we examine the effects that earnings management has on expense stickiness. Defining small positive profits or small earnings increases as earnings management, we observe significant expense stickiness in the non-earnings-management sub-sample, compared with the earnings-management sub-sample. When we divide expenses into R&D, advertising and other general expenses, we find that managers control expenses mainly by decreasing general expenses. We further examine corporate governance’s effect on expense stickiness. Using factor analysis, we extract eight main factors and find that good corporate governance reduces expense stickiness. Finally, we investigate the interaction effects of earnings management and corporate governance on expense stickiness. The empirical results show that good corporate governance can further reduce cost stickiness, although its effect is not as strong as that of earnings management.

中文翻译：

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盈余管理，公司治理和费用粘性

摘要成本和费用粘性是会计和经济学研究中的一个重要问题，文献表明，成本粘性不能与管理者的动机分开。在本文中，我们研究了盈余管理对费用粘性的影响。在定义小额正利润或小额收入随收益管理而增长的情况下，与收益管理子样本相比，我们在非收益管理子样本中观察到了显着的支出粘性。当我们将支出分为研发，广告和其他一般支出时，我们发现管理人员主要通过减少一般支出来控制支出。我们将进一步研究公司治理对费用粘性的影响。使用因素分析，我们提取了八个主要因素，发现良好的公司治理可以降低费用的粘性。最后，我们研究了收益管理和公司治理对费用粘性的交互作用。实证结果表明，良好的公司治理可以进一步降低成本粘性，尽管其效果不如盈余管理那么强。