Considering the Effect of Costs Stickiness on Corporate Governance Quality

There is a symmetric relationship between costs and activity volume according to cost accounting literature. However, the recent research shows that reducing the costs intensity associated with reducing the activity volume is less than increasing the costs intensity due to increasing the activity volume. This costs nonsymmetrical behavior is called cost stickiness. The relationship between cost stickiness and corporate governance is considered in this study. The corporate governance includes the criteria that can reduce the managers’ power to pursue their own interests by increasing the decentralization in the company controls and cause to improve the firm performances. In this research, the grade of the typically member companies using the extensive questionnaire includes 25 criterion of the corporate governance criteria has been measured. These criteria obtained from the regulation content of the corporate governance system of listed companies in Tehran Stock Exchange are in three classes: informational transparency, board of director structure and ownership structure. To this purpose, the 4-year information of 100 companies during financial years from 2010 to 2014 was considered and the research hypotheses were examined using the regression method. According to the obtained results, the greater costs stickiness, the lesser corporate governance will be and in the other hand, there is not a significant difference between the amounts of costs stickiness in the various industries.