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.
حسونة, محمد السيد. (2020). The relationship between earning management incentives and cost stickiness: Empirical evidence Egypt. مجلة البحوث التجارية, 42(4), 55-80. doi: 10.21608/zcom.2020.132851
MLA
محمد السيد حسونة. "The relationship between earning management incentives and cost stickiness: Empirical evidence Egypt". مجلة البحوث التجارية, 42, 4, 2020, 55-80. doi: 10.21608/zcom.2020.132851
HARVARD
حسونة, محمد السيد. (2020). 'The relationship between earning management incentives and cost stickiness: Empirical evidence Egypt', مجلة البحوث التجارية, 42(4), pp. 55-80. doi: 10.21608/zcom.2020.132851
VANCOUVER
حسونة, محمد السيد. The relationship between earning management incentives and cost stickiness: Empirical evidence Egypt. مجلة البحوث التجارية, 2020; 42(4): 55-80. doi: 10.21608/zcom.2020.132851
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