Effect of Cost Stickiness on Symmetry Time Profit with Emphasis on Relationship between Cost Stickiness and Conditional Conservatism

Document Type : Research Paper

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Abstract

The aim of this study is to investigate the effect of cost stickiness on symmetry time profit, emphasizing on the relationship between cost stickiness and conditional conservatism in the company accepted in Tehran Stock Exchange. For this purpose three hypotheses were developed and the data on 120 companies in the Tehran Stock Exchange for the period 1383 to 1390 were analyzed. The regression model of panel data with fixed effects was used for test hypotheses.
     The results showed that the sticky behavior of cost has impact on the asymmetry relationship between earnings and returns, and caused time asymmetry in earnings recognition. Furthermore, the results showed that in the companies with sticky behavior of costs, earnings reflect negative news more quickly. Also, firms with sticky cost have conditional conservatism more than other companies.

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  • Receive Date: 11 June 2014
  • Accept Date: 11 June 2014

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