Abstract

http://ssrn.com/abstract=1659493
 
 

References (40)



 
 

Citations (3)



 


 



Sticky Cost Behavior: Theory and Evidence


Rajiv D. Banker


Temple University - Department of Accounting

Dmitri Byzalov


Temple University - Fox School of Business and Management

Jose M. Plehn-Dujowich


Temple University - Department of Accounting

August 16, 2010

AAA 2011 Management Accounting Section (MAS) Meeting Paper

Abstract:     
We synthesize the rapidly-growing literature on sticky costs that provides an alternative model of cost behavior. This model postulates that many costs arise as a result of deliberate resource commitment decisions by forward-looking managers in the presence of adjustment costs, in contrast to the traditional textbook view that costs adjust mechanically with contemporaneous changes in activity. First, we present the theoretical framework of sticky costs, to develop the main empirical hypotheses. Next, we review the empirical evidence and find that it lends strong support to the sticky costs model. We also discuss recent papers that question the validity of the sticky costs approach, and show that their claims are not actually justified because of their unrealistic assumptions and flaws in their econometric analysis. When these problems are fixed, the analysis in these papers actually lends additional support to the sticky costs framework. Finally, we present new comprehensive empirical evidence that also supports the sticky cost framework for the Global Compustat data which includes both developed economies and emerging economies.

Number of Pages in PDF File: 74

Keywords: sticky costs

JEL Classification: M4

working papers series


Download This Paper

Date posted: August 17, 2010 ; Last revised: December 14, 2010

Suggested Citation

Banker, Rajiv D. and Byzalov, Dmitri and Plehn-Dujowich, Jose M., Sticky Cost Behavior: Theory and Evidence (August 16, 2010). AAA 2011 Management Accounting Section (MAS) Meeting Paper. Available at SSRN: http://ssrn.com/abstract=1659493 or http://dx.doi.org/10.2139/ssrn.1659493

Contact Information

Rajiv D. Banker
Temple University - Department of Accounting ( email )
Philadelphia, PA 19122
United States

Dmitri Byzalov (Contact Author)
Temple University - Fox School of Business and Management ( email )
Philadelphia, PA 19122
United States
HOME PAGE: http://astro.temple.edu/~dbyzalov/

Jose M. Plehn-Dujowich
Temple University - Department of Accounting ( email )
Philadelphia, PA 19122
United States

Feedback to SSRN


Paper statistics
Abstract Views: 39
Downloads: 7
References:  40
Citations:  3

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.281 seconds