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Control-Oriented Inventory Production and Sales Activities in Chinese Manufacturing Firms

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  • Haihong He

Abstract

This study uses a sample of Chinese manufacturing firms to examine the association between current period inventory production costs and sales changes in adjacent past and future periods. The results find an overall significant association between inventory production and the past period sales changes, but no association between inventory production and the future period sales changes. Further, we find that in firms with high return on assets, inventory production is only associated with the past period sales changes, but not with the future period sales changes; in contrast, in firms with low return on assets, inventory production is only associated with the future period sales changes, but not with the past period sales changes. The results, on one hand confirm our perception of control oriented management accounting practices in China, on the other hand suggest that firm performance is associated with such management emphasis in China.

Suggested Citation

  • Haihong He, 2018. "Control-Oriented Inventory Production and Sales Activities in Chinese Manufacturing Firms," Accounting and Finance Research, Sciedu Press, vol. 7(2), pages 134-134, May.
    • Handle: RePEc:jfr:afr111:v:7:y:2018:i:2:p:134
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    References listed on IDEAS

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    2. Yang, ChunLei & Modell, Sven, 2015. "Shareholder orientation and the framing of management control practices: A field study in a Chinese state-owned enterprise," Accounting, Organizations and Society, Elsevier, vol. 45(C), pages 1-23.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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