An Investigation the Impact of Manager's Overconfidence on Costs Stickiness

In this research, it was investigated the impact of managers’ overconfidence on costs stickiness during 2006-2013. To do this study, 150 listed companies in Tehran Stock Exchange in mentioned period were selected. To testify of research hypotheses was applied pooled/panel regression analysis in software EViews 6. Exerted independence (explanatory) variables contain change in logarithm of sale (sale growth), sale decrease dummy variable, and managers’ overconfidence criteria based on capital expenditures and overinvest on assets. The dependent variable in this study is change in logarithm of operatioal costs (operatioal costs growth). In the research, Asset Intensity, Free Cash Flow, and CEO Bonus were used as control variables, too.
Findings indicate that operatioal costs are stickiness in total level of companies. Other results show the direct effect of managers’ overconfidence criteria on costs stickiness.