Do Managers’ Deliberate Decisions Induce Sticky Costs?

Kama, Itay; Weiss, Dan

doi:10.2139/ssrn.1558953

Cited by 25 publications

(24 citation statements)

References 1 publication

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“…Similarly, Kama & Weiss (2012) found two possible sources of sticky cost. Firstly, they found that companies that were limited in terms of technology exhibited sticky costs.…”

Section: Sticky Costmentioning

confidence: 93%

Relationship between Real Earnings Management and Cost Behavior

Boakye

Atiso

Koranteng

2019

SJOM

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Purpose- This research aims to examine the relationship between real earnings management (REM) and sticky Selling General and Administrative (SG&A) costs in the case of a developing economy. Design/Methodology- The study employed a purposive sampling method. Fifteen firms listed on Ghana stock exchange were selected for the study. Data from the period of 2005 to 20014 were collected. Findings- The study finds Ghanaian listed firm's SG&A cost to be sticky and also see these firms to manipulate earnings through REM. This study finds that REM through discretionary expenses and production cost increases sticky SG&A cost, whereas REM through cash flow reduces sticky SG&A cost. Overall, the results imply that REM exhibit sticky cost. Practical Implications- The study informs managers that cost is not only fixed or variable but also behaves asymmetrically. The understanding of this concept could help managers to implement strategies that will lower the cost of doing business. Also, since some managers deliberately make decisions that lead to real earnings management and sticky cost, we, therefore, believe that this research will be of importance to regulatory bodies, policymakers, investors, and other stakeholders.

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“…Similarly, Kama & Weiss (2012) found two possible sources of sticky cost. Firstly, they found that companies that were limited in terms of technology exhibited sticky costs.…”

Section: Sticky Costmentioning

confidence: 93%

Relationship between Real Earnings Management and Cost Behavior

Boakye

Atiso

Koranteng

2019

SJOM

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“…Sebagai akibatnya perusahaan tidak bisa melakukan penghematan. Pada saat penjualan menurun, perusahaan dengan kos stickiness tinggi menunjukkan penurunan laba yang lebih besar daripada perusahaan dengan kos stickiness rendah (Kama & Weiss, 2010).…”

Section: |unclassified

Respon Investor Terhadap Pengumuman Laba Industri Perbankan Yang Menghadapi Kos Stickiness

Windyastuti

Sunaryo

Hastuti

2017

Jurnal Keuangan Dan Perbankan

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This study aimed to analyze the response of investors to the announcement of the financial statements of the banking sector. The population in this study was the banking industry. This study used purposive sampling method. Based on sampling techniques the number of samples in this study were 11 banks. The research period was 2002-2014. The analysis technique used was panel data regression. The result showed that investor response to the financial statements of banks which faced cost stickiness was weak. The increase of cost stickiness on banking sector led the weak investor response to the announcement of the financial statements of banks. In the banking companies facing cost stickiness problem, earnings prediction accuracy reduced. This causes the income statement would provide information that was less important to the earnings prediction in the next periods. AbstrakPenelitian ini bertujuan untuk menganalisis respon investor terhadap pengumuman laporan keuangan sektor perbankan. Populasi dalam penelitian ini adalah industri perbankan. Penelitian ini menggunakan metode purposive sampling. Berdasarkan teknik sampling jumlah sampel dalam penelitian sejumlah 11 bank. Periode penelitian tahun 2002-2014. Teknik analisis yang digunakan regresi berganda data panel. Hasil penelitian menunjukkan lemahnya respon investor terhadap laporan keuangan perbankan yang menghadapi kos stickiness. Kenaikan kos stickiness sektor perbankan menyebabkan lemahnya respon investor terhadap pengumuman laporan keuangan perbankan. Pada perusahaan perbankan yang menghadapi masalah kos stickiness, akurasi prediksi laba berkurang. Hal ini menyebabkan laba yang dilaporkan akan memberikan informasi yang kurang penting bagi prediksi laba periode mendatang.

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“…Because cutting labor resources not only need to pay severance payments, compensation, etc., but also need to bear re-recruit staff costs and training costs. Part of authors' literature support this view, such as ABJ, Banker &Chen and Kama & Weiss [14] [15]. For example, the study of ABJ found that in the sustained decline period, managers expect the future product demand will continue to decline, so they will cut loose resources, resulting in cost stickiness reduced.…”

Section: Labor Cost Stickinessmentioning

confidence: 99%

A Study on the Labor Cost of Chinese Listed Companies—Based on the Perspective of Labor Contract Law

Zhang¹

2016

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Given the background of enterprises facing with rising labor costs and shortage of human resources, we use a large sample of firms in China during 2004-2011 to test the sticky characteristic of labor cost. We also test the effect of labor protection on cost stickiness based on the implementation of Labor Contract Law. We find that the labor cost of listing firms in China is sticky, and the stickiness of state-owned enterprises is higher than that of non-state-owned enterprises. Furthermore, implementation of Labor Contract Law increased labor cost stickiness, both state-owned enterprises and non-state-owned enterprises.

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Do Managers’ Deliberate Decisions Induce Sticky Costs?

Cited by 25 publications

References 1 publication

Relationship between Real Earnings Management and Cost Behavior

Relationship between Real Earnings Management and Cost Behavior

Respon Investor Terhadap Pengumuman Laba Industri Perbankan Yang Menghadapi Kos Stickiness

A Study on the Labor Cost of Chinese Listed Companies—Based on the Perspective of Labor Contract Law

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