Cost Stickiness and Core Competency: A Note
21 Pages Posted: 28 Mar 2008
Date Written: January 16, 2008
Using data from Ontario hospitals, we investigate the conjecture that the stickiness of costs would be greater for functions that relate to an organization's core competency. We find operating costs for the hospital as a whole are sticky. Moreover, we find higher stickiness in costs pertaining to patient care relative to costs in other functions. Indeed, there is no evidence of stickiness in the operating costs of support departments that are peripherally related to the hospital's mission.
Keywords: cost structure, sticky cost, hospitals
JEL Classification: D23, M40, M46, M47, M48
Suggested Citation: Suggested Citation