Recently, Tian Xuan and his co-authors’ paper "Asymmetric Cost Behavior and Dividend Policy” was officially accepted and ready to publish by Journal of Accounting Research, one of the top academic journals in the world. The paper is co-authored by Professor Tian Xuan at Tsinghua PBCSF, Jie He, Associate Professor at the University of Georgia, Huan Yang, Assistant Professor at the University of Massachusetts at Amherst, and Luo Zuo, Associate Professor at Cornell University. This paper makes a deep analysis on the mechanism of "how cost stickiness affects a firm’s dividend payouts".

The present studies found that there is asymmetry in enterprises cost behavior, that is cost stickiness, where the costs fall less for sales decreases than they rise for equivalent sales increases. At the same time, there also shows the stickiness in dividend policy. In the paper "Asymmetric Cost Behavior and Dividend Policy", Tian Xuan and his co-authors found that enterprises firms with higher resource adjustment costs and stickier costs pay lower dividends than their peers because they are less able to sustain any higher level of dividend payouts in the future.

Using a regression discontinuity design, the paper exploits the negative relation between cost stickiness and dividend payouts. The paper sheds new light on the determinants of dividend policy and demonstrates the role of cost behavior in corporate decisions.

Introduction to the Author:

Tian Xuan, Associate Dean and Chair Professor of Finance, Doctoral Supervisor at PBC School of Finance, Tsinghua University; Winner of National Outstanding Youth Fund; Winner of Outstanding Young Scientists; Member of the First ChiNext Board Listing Committee, SZSE; Research Grant for Major Projects of the National Natural Science Foundation. Professor Tian’s main research fields include corporate finance, corporate innovation, venture capital and mergers and acquisition. His research works have been published in leading academic journals for many times. In 2012 and 2019 respectively, he won the Jensen Prize awarded by Journal of Financial Economics. Many of his papers ranked among the top 1% of top papers in the world.