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The influence of the trade-off between profitability and future increases in sales on cost stickiness

(c) Universidad de Chile, 2017 info:eu-repo/semantics/openAccess ;ISSN: 0304-2758 ;DOI: 10.4067/S0718-52862017000100081

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  • Title:
    The influence of the trade-off between profitability and future increases in sales on cost stickiness
  • Author: Argilés Bosch, Josep M ; García Blandón, Josep ; Ravenda, Diego ; Valencia Silva, Maika ; Somoza López, Antonio
  • Subjects: Anàlisi financera ; Investment analysis ; Rate of return ; Rendibilitat
  • Description: This study analyses cost stickiness under the dilemma between current profitability and future sales increase. When activity decreases firms are faced to keep profitability adjusting resources, while they should also consider long term consequences and keep slack resources which allow building firms capacities to adapt to external challenges and take advantage of future opportunities. We find empirical evidence that changes in current firm profitability and one year ahead sales increase significantly influence resource adjustment in periods when sales decrease. We find a significant moderating effect of changes in profitability, as well as a significant stressing effect of one year ahead sales increase, on cost stickiness.
  • Publisher: Universidad de Chile
  • Creation Date: 2017-06
  • Language: English
  • Identifier: ISSN: 0304-2758
    DOI: 10.4067/S0718-52862017000100081
  • Source: Alma/SFX Local Collection
    Diposit Digital de la Universitat de Barcelona
    ProQuest Central
    DOAJ Directory of Open Access Journals

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