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| Research on the Stickiness of Inventory Investment in Chinese Listed Companies |
| ZHANG Liangliang，HUANG Shimeng，CHAI Ziqian |
| China University of Mining and Technology, Xuzhou, Jiangsu, China |
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Abstract Using the listed companies of Shanghai and Shenzhen A-share manufacturing industries from 2007 to 2020 as samples, this study investigates the stickiness of corporate inventory investment. The results show that inventory investment declines less when sales decrease than it rises when the corresponding sales increase, which means that corporate inventory investment is sticky. Considering the differences between inventory types, we find that investment stickiness is stronger for finished products. Furthermore, managers’ optimistic expectations about future demand, the stability of market demand, and the desire to avoid high costs of stockout are important drivers of inventory investment stickiness. In addition, the stronger the stickiness of inventory investment is, the faster the future corporate sales will grow, the stronger the market competitiveness, and the more optimistic and accurate the analyst’s sales forecast will be. The above results indicate that inventory investment stickiness can improve the firms’ future market performance and provide market participants with useful information about future sales growth.
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Received: 14 September 2022
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