The Effect of Economic Uncertainty on Cost Stickiness Behavior

Subject Areas : Financial and Behavioral Researches in Accounting

behzad rezazadeh ¹ , shokrollah khajavi ² , Allah Karam Salehi ³

1 - Department of Accounting, Khorramshahr International Branch, Islamic Azad University, Khorramshahr, Iran
2 - Department of Accounting, , Shiraz University, Shiraz, Iran
3 - Department of Accounting, Masjed Soleiman Branch, Islamic Azad University, Masjed Soleiman, Iran

Received: 2021-06-04 Accepted : 2021-07-07 Published : 2021-08-23

Keywords: Economic Growth, Macroeconomic Uncertainty, inflation rate, Exchange Rate and Cost Stickiness,

Abstract :

The purpose of this research is to study macroeconomic uncertainty measures effect on cost stickiness conducting two steps Fama-Macbeth regression models on listed companies of Tehran Stock Exchange. In order to estimate macroeconomic uncertainty four measures of GDP growth, inflation rate, exchange rate and interest rate have been utilized by Arch and Garch models. For this purpose, a hypothesis is developed and the data of108 listed companies of Tehran Stock Exchange is analyzed during the period of 2011 to 2019. The research regression model is tested by two steps Fama-Macbeth regression model. Results show a positive significant effect of macroeconomic uncertainty measures (measures of GDP growth, inflation rate, exchange rate and interest rate) on cost stickiness. Thus, results hold that macroeconomic uncertainty measures increase cost stickiness.

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