Abstract

http://ssrn.com/abstract=1909348
 
 

References (40)



 
 

Citations



 


 



Employment Protection Legislation, Adjustment Costs and Cross-Country Differences in Cost Behavior


Rajiv D. Banker


Temple University - Fox School of Business and Management

Dmitri Byzalov


Temple University - Fox School of Business and Management

Lei Tony Chen


affiliation not provided to SSRN

August 27, 2012

Journal of Accounting and Economics, Forthcoming

Abstract:     
Central to the economic theory of sticky costs is the proposition that managers consider adjustment costs when changing resource levels. We test this proposition using employment protection legislation (EPL) provisions in different countries as a proxy for labor adjustment costs. Using a large sample of firms in 19 OECD countries during 1990-2008, we find that the degree of cost stickiness at the firm level varies with the strictness of the country-level EPL provisions. This finding supports the theory that cost stickiness reflects the deliberate resource commitment decisions of managers in the presence of adjustment costs.

Keywords: Sticky costs, Employment protection legislation, Labor adjustment costs

JEL Classification: M41

Accepted Paper Series


Not Available For Download

Date posted: August 15, 2011 ; Last revised: September 18, 2012

Suggested Citation

Banker, Rajiv D. and Byzalov, Dmitri and Chen, Lei Tony, Employment Protection Legislation, Adjustment Costs and Cross-Country Differences in Cost Behavior (August 27, 2012). Journal of Accounting and Economics, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1909348 or http://dx.doi.org/10.2139/ssrn.1909348

Contact Information

Rajiv D. Banker
Temple University - Fox School of Business and Management ( 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/
Lei Tony Chen
affiliation not provided to SSRN ( email )
Feedback to SSRN


Paper statistics
Abstract Views: 804
People who downloaded this paper also downloaded:
1. The Impact of the Reward Structure on Stickiness
By Eelke Wiersma

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.422 seconds