skip to main content
Language:
Search Limited to: Search Limited to: Resource type Show Results with: Show Results with: Search type Index

Economic growth and cost stickiness: evidence from Egypt

Journal of financial reporting & accounting, 2015-01, Vol.13 (1), p.119-140 [Peer Reviewed Journal]

Emerald Group Publishing Limited ;Emerald Group Publishing Limited 2015 ;ISSN: 1985-2517 ;EISSN: 2042-5856 ;DOI: 10.1108/JFRA-06-2014-0052

Full text available

Citations Cited by
  • Title:
    Economic growth and cost stickiness: evidence from Egypt
  • Author: Ibrahim, Awad Elsayed Awad
  • Subjects: Accounting ; Accounting & Finance ; Cost accounting ; Costs ; Economic crisis ; Economic growth ; Economic models ; Financial reporting ; Hypotheses ; Management accounting ; Prosperity ; Recessions ; Studies ; Variables
  • Is Part Of: Journal of financial reporting & accounting, 2015-01, Vol.13 (1), p.119-140
  • Description: Purpose – This paper aims to examine whether costs respond asymmetrically to demand change, and examine the influence of economic growth on cost stickiness, in the pre- and post-2008 financial crisis periods. Design/methodology/approach – This study uses multiple regression models to investigate the behavior of three costs: selling, general and administrative (SG & A), cost of goods sold (COGS) and operating costs (OCs) for the 2004-2011 period. Moreover, the study compares cost stickiness during the economic prosperity period (2006-2008) with cost stickiness during the economic recession period (2009-2011). Findings – The results reveal that SG & A increased by 0.38 per cent but decreased by 0.08 per cent, and COGS increased by 1.02 per cent but decreased by 0.57 per cent for a 1 per cent demand change, which proves cost stickiness. However, OC increased by 0.91 per cent, but decreased by 1.03 per cent for a 1 per cent demand change, which proves cost anti-stickiness. Moreover, SG & As were sticky during the prosperity period, but anti-sticky during the recession period. COGSs were sticky in both periods; however, the extent of cost stickiness is larger in the prosperity period. In contrast, OC were statistically insignificant in both periods. Originality/value – The results imply that managers should not use the same cost model all the time, as the economic growth fluctuations were found to affect the nature and extent of cost behavior. In addition, researchers should provide a modified cost model that considers the nonlinearity of correlation between costs and activity.
  • Publisher: Bingley: Emerald Group Publishing Limited
  • Language: English
  • Identifier: ISSN: 1985-2517
    EISSN: 2042-5856
    DOI: 10.1108/JFRA-06-2014-0052
  • Source: ProQuest Central
Back to results list
INSPIRE LIBRARY - TON DUC THANG UNIVERSITY (84-028) 37 755 057 Feedback
19 Nguyen Huu Tho St. Dist.7, HCM thuvien@tdtu.edu.vn

Copyright © 2017 INSPIRE LIBRARY - TON DUC THANG UNIVERSITY

Searching Remote Databases, Please Wait