M.A. Thesis:

Product market competition, Financial Strength and Cost Stickeness

The managerial incentives play an important role in forming cost asymmetric behavior. When managers are encountered with incentives to avoid losses or reduce profits, so that they accelerate the downsizing of resources to buy and reduce sales. These decisions are caused to reduce the cost-stickiness. They assume that such a behavior changes the asymmetry of public and administrative costs to the optimal level, and leads to more public and administrative costs asymmetry than what economic factors have predicted. The main objective of this research is to investigate the relationship between product market competition, financial affordance and cost stickiness based on capital market evidence. In this applied research with a post-event descriptive-correlational approach (Based on past and historical information) using financial statements of companies in Tehran Stock Exchange (Statistical population), the hypotheses testing analysis was conducted with the help of multivariate regression during 2009-2010 (Interval of seven years old). The case-study sample data were also gathered through a screening method and the research hypotheses were tested using R statistical software. The results of gathered data analysis for testing hypotheses using multivariate regression at expected error level (5 percent) was indicated that there is a significant relationship between product market competition and cost stickiness. Note that in this hypothesis, the product market competition was measured through the four indicators of the Harpindal-Hirschman, Lerner, Lerner moderator and the firm's concentration and in all four cases the results were significant. Also, the other results of the research showed that the financial affordance of the firm has a significant impact on the relationship between product market competition and cost stickiness.

Keywords: Product market competition, Financial affordance, Cost stickiness.