Investigate costs stickiness in economic prosperity and recession cycles

Subject Areas : Management Accounting

Mehdi Baharmoghaddam ¹ (دانشیار حسابداری ، دانشگاه شهید باهنر کرمان)
Sasan Khademi ² (کارشناس ارشد حسابداری، دانشگاه شهید باهنر کرمان)

Received: 2016-02-04 Accepted : 2016-04-13 Published : 2016-10-22

Keywords: costs stickiness, Costs anti-Stickiness, Costs Behavior, Economic Prosperity, Economic Recession,

Abstract :

Unlike the traditional cost system which basically focuses on symmetric cost behaviors with respect to change in level of activity, a good deal of recent research show asymmetric behavior of various costs. asymmetric cost behavior might differ in various respects such as stickiness and anti-stickiness, the degree and intensity of it in different business cycles including prosperity, recession or economic crisis. this study aims to investigate asymmetric behaviors of selling, general and administrative costs (SG&A) and cost of good sold (COGS) during 2001 and 2014. It also investigates cost behavior with respect to their stickiness and anti-stickiness separately in each prosperity and recession cycles in the mentioned period. For this purpose, data gathered in the form of combined firm-year observation from 189 firms listed in Tehran stock exchange has been examined in the period studied, as well as prosperity and recession cycles by multiple regression test. The results reveal that behavior of mentioned costs is asymmetric in the whole period. Also findings of this study highlighted that prosperity and recession cycles do not affect managers᾿ perspectives, therefore, SG&A in all cycles including prosperity and recession cycles is sticky and COGS is approximately anti-Sticky in all cycles.

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