Sticky Cost Behavior: Evidence from BRICS+T Countries

Öz

The aim of this study is to determine the sticky cost behavior of publicly-traded companies in Brazil, Russia, India, China, South Africa and Turkey (BRICS+T) that are classified as developing economies during the period 2010-2019. In addition to the purpose, the firm characteristics that play a role in the sticky cost behavior of firms and the effect of the Gross Domestic Product (GDP), which is a macroeconomic indicator, has been investigated. The study revealed that the firms in BRICS+T exhibit a sticky cost behavior. Furthermore, it also suggested that inventory intensity, which is one of the firm characteristics, does not affect cost stickiness and that asset, employee and property, plant and equipment intensity raise the level of cost stickiness while debt intensity declines the level of cost stickiness. Last but not least, it was found out that GDP, which is a macroeconomic indicator, raises the sticky cost level when it tends to rise.

Anahtar Kelimeler

• Cost stickiness
• Asymmetric cost behavior
• Sticky cost behavior
• Firm characteristics
• BRICS+T firms

Kaynakça

1. Abu-Serdaneh, J. (2014). The asymmetrical behavior of cost: evidence from Jordan. International Business Research, 7(8),113-122. http://dx.doi.org/10.5539/ibr.v7n8p113.
2. Alexandridis, G., Mavrovitis, C.F., & Travlos, N.G. (2012). How have M&As changed? Evidence from the sixth merger wave. The European Journal of Finance, 18, 663–688. https://doi.org/10.1080/1351847X.2011.628401.
3. Anderson, M. C., Banker, R. D. & Janakiraman, S. N. (2003). Are selling, general, and administrative costs “sticky”?. Journal of Accounting Research, 41(1), 47-63. https://doi. org/10.1111/1475-679X.00095.
4. Anderson, S.W. & Lanen, W.N. (2009). Understanding cost management: what can we learn from the empirical evidence on “sticky costs”?. SSRN Electronic Journal. 1-42. http:// dx.doi.org/10.2139/ssrn.975135.
5. Balakrishnan, R., Peterson, M. J. & Soderstrom, N. S. (2004). Does capacity utilization affect the “stickiness” of cost?. Journal of Accounting, Auditing & Finance, 19(3), 283-299. https://doi.org/10.1177/0148558X0401900303.
6. Banker, R. D. & Byzalov, D. (2014). Asymmetric cost behavior. Journal of Management Accounting Research, 26(2), 43-79.
7. Banker, R. D. & Chen, L. (2006). Predicting earnings using a model based on cost variability and cost stickiness. The Accounting Review, 81(2), 285-307. https://www.jstor.org/ stable/4093140.
8. Banker, R. D., Byzalov, D., & Plehn-Dujowich, J. M. (2011). Sticky cost behavior: theory and evidence. SSRN Electronic Journal, http://dx.doi.org/10.2139/ssrn.1659493.

9. Banker, R.D., Byzalov, D. & Chen, L.T. (2013). Employment protection legislation, adjustment costs and cross-country differences in cost behavior. Journal of Accounting and Economics, 55(1), 111-127. https://doi.org/10.1016/j. jacceco.2012.08.003.
10. Betzer, A., Doumet, M., & Goergen, M. (2015). Disentangling the link between stock and accounting performance in acquisitions. The European Journal of Finance, 21(9), 755–771. https://doi.org/10.1080/1351847X.2014.890633.
11. Bradbury, M. E. & Scott, T. (2014). Do Managers understand asymmetric cost behavior?. Working Paper, Social Science Research Network.
12. Bradbury, M. E. & Scott, T. (2018). Do managers forecast asymmetric cost behaviour?. Australian Journal of Management, 4 3 ( 4 ) , 538-554. ht t p s : / / d o i . org/10.1177/0312896218773136.
13. Bu, D., Wen, C. & Banker, R. D. (2015). Implications of asymmetric cost behaviour for analysing financial reports of companies in China. China Journal of Accounting Studies, 3(3), 1-28. https://doi.org/10.1080/21697213.2015.1062 343.
14. Bugeja, M., Lu, M. & Shan, Y. (2015). Cost stickiness in australia: characteristics and determinants. Australian Accounting Review, 25(3), 248-261. https://doi.org/10.1111/ auar.12066.
15. Calleja, K., Steliaros, M. & Thomas, D. C. (2006). A Note on cost stickiness: some international comparisons. Management Accounting Research, 17, 127-140. https://doi. org/10.1016/j.mar.2006.02.001.
16. Chen, C. X., Lu, H. & Sougiannis, T. (2012). The agency problem, corporate governance, and the asymmetrical behavior of selling, general, and administrative costs. Contemporary Accounting Research, 29(1), 252-282. https://doi. org/10.1111/j.1911-3846.2011.01094.x.
17. Cook, D. O., Kieschnick, R. & Moussawi, R. (2019). Operating leases, operating leverage, operational inflexibility and sticky costs. Finance Research Letters, 31, 369-373. https:// doi.org/10.1016/j.frl.2018.12.012.
18. Cooper, R., & Kaplan, R. (1998a). The design of cost management systems: text, cases, and readings. Upper Saddle River, NJ: Prentice Hall.
19. Cooper, R., & Kaplan, R. (1998b). Cost and effect-using integrated cost systems to drive profitability and performance. Boston: Harvard Business School Press.
20. Çelik, M. & Kök, D. (2013). Türkiye’de Maliyet Yapışkanlığının Geçerliliği: İstanbul Menkul Kıymetler Borsası (IMKB) Örneğinde Panel Veri Analizi. Business and Economics Research Journal, 4(4), 37-48.
21. Dalla Via, N. & Perego, P. (2014). Sticky cost behavior: evidence from small and medium-sized companies. Accounting& Finance, 54(3), 753-778. https://doi.org/10.1111/acfi.12020.
22. Dierynck, B., Landsman, W.R. & Renders, A. (2012). Do Managerial incentives drive cost behavior? evidence about the role of the zero earnings benchmark for labor cost behavior in private belgian firms. The Accounting Review, 87(4), 1219-1246. https://doi.org/10.2308/accr-50153.
23. Erdoğan, M., Öksüz D. M., Erdoğan, E. O. & Ömürbek, V. (2019). BİST’de Sektörler İtibariyle Maliyet Yapışkanlığının Panel Veri Analizi ile İncelenmesi, Süleyman Demirel Üniversitesi Vizyoner Dergisi, 10(24), 264-274. https://doi.org/10.21076/ vizyoner.529402.
24. Gu, L., Hackbarth. & D., Johnson, T. (2017). Inflexibility and stock returns. SSRN Electronical Journal. 1-61. http://dx.doi. org/10.2139/ssrn.3032838.
25. Hacıhasanoğlu, T. & Dalkılıç, E. (2018). Maliyet Yapışkanlığı Hipotezinin BİST İmalat Sektörü Kapsamında Test Edilmesi. Hitit Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 11(3), 1802-1808. https://doi.org/10.17218/hititsosbil.479221.
26. Hartlieb, S. & Loy, T. R. (2017). Evidence on the trade-off between cost stickiness and income smoothing. SSRN Electronical Journal. http://dx.doi.org/10.2139/ssrn.2814309.
27. Ibrahim, A. E. A. & Ezat, A. N. (2017). Sticky cost behavior: evidence from Egypt. Journal of Accounting in Emerging Economies, 7(1), 16-34. https://doi.org/10.1108/JAEE-06- 2014-0027.
28. Ibrahim, A. E. A. (2018). Board characteristics and asymmetric cost behavior: evidence from Egypt. Accounting Research Journal, 31(2), 301-322. https://doi.org/10.1108/ARJ-11- 2015-0148.
29. Ibrahim, A.E.A. (2015). The economic growth and cost stickiness: evidence from Egypt. Journal of Financial Reporting and Accounting, 13(1), 119-140. https://doi.org/10.1108/ JFRA-06-2014-0052.
30. Jang, Y., Yehuda, N., & Radhakrishnan, S. (2017). Asymmetric cost behavior and value creation in M&A deals. SSRN Electronic Journal, 1-56. http://dx.doi.org/10.2139/ ssrn.2824132.
31. Kama, I. & Weiss, D. (2013). Do earnings targets and managerial ıncentives affect sticky costs?. Journal of Accounting Research,51(1), 201-224. https://doi.org/10.1111/j.1475- 679X.2012.00471.x.
32. Karadeniz, E., Günay, F. & Koşan, L. (2019). Halka açık konaklama işletmelerinde maliyet yapışkanlığının analizi. Journal of Tourism Theory and Research, 5(2), 171-181.
33. Kim, J. B., & Wang, K. (2014). Labor unemployment risk and sticky cost behavior. SSRN Electronic Journal. 1-46. Working Paper, University of Waterloo.
34. Koo, J. H., Song, S. & Paik, T.Y. (2015). Earnings management and cost stickiness. Advanced Science and Technology Letter, 84, 40-44. http://dx.doi.org/10.14257/astl.2015.84.09.
35. Lee, J. Z. & Chiang, C. H. (2018). D&O Insurance and SG&A cost stickiness. SSRN Electronical Journal, http://dx.doi. org/10.2139/ssrn.3234103.
36. Magheed, B. A. (2016). The determinants of the sticky cost behavior in the Jordanian industrial companies listed in Amman Stock Market. Journal of Accounting-Business and Management, 23(1), 64-81. http://journal.stie-mce.ac.id/ index.php/jabminternational/article/view/100>.
37. Noreen, E. (1991). Conditions under which activity-based cost systems provide relevant costs. Journal of Management Accounting Research, 3, 159–168.
38. Novy-Marx, R. (2011). Operating leverage. Review of Finance, 15(1), 103-134. https://doi.org/10.1093/rof/rfq019.
39. Orhunbilge, A. N. (2002). Uygulamalı regresyon ve korelasyon analizi. İstanbul: İstanbul Üniversitesi Basım ve Yayınevi Müdürlüğü.
40. Öztürk, E. & Zeren, F. (2016). Maliyet Yapışkanlığının Geçerliliğinin Test Edilmesi: Borsa İstanbul Örneği. Mehmet Akif Ersoy Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 8(15), 31-42. https://doi.org/10.20875/sb.05076.
41. Pichetkun, N. (2012). The determinants of sticky cost behavior on political costs, agency costs, and corporate governance perspectives. Ph.D. Thesis, Faculty of Business Administration, Rajamangala University of Technology Thanyaburi, Thanyaburi.
42. Porporato, M. & Werbin, E. (2012). Evidence of sticky costs in banks of Argentina, Brazil and Canada. International Journal of Financial Services Management, 5(4), 303-320. https://doi.org/10.1504/IJFSM.2012.048834.
43. Sinițîn, N. & Socol, A. (2020). Determinants of Banking Profitability through ROA and ROE: A Panel Data Approach. Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, 20(1), 1037-1043.
44. Subramaniam, C. & Watson, M. (2016). Additional evidence on the sticky behavior of costs. Advances in Management Accounting, 26, 275-305. https://doi.org/10.1108/S1474- 787120150000026006.
45. Subramaniam, C. & Weidenmier, M. (2003). Additional evidence on the sticky behavior of costs. Working Paper, Texas Christian University.
46. Uğurlu, M., Danışman, G. Ö., Bilyay-Erdoğan, S. & Vural-Yavaş, Ç. (2019). Asymmetric cost behavior and acquirer returns: evidence from U.S. Mergers. Ege Academic Rewiew, 19(3), 323-339. https://doi.org/10.21121/eab.536640.
47. Xue, S. & Hong, Y. (2016). Earnings management, corporate governance and expense stickiness. China Journal of Accounting Research, 9(1), 41-58. https://doi.org/10.1016/j. cjar.2015.02.001.
48. Wooldridge, J. M. (2002). Econometric analysis of cross section and panel data. The MIT Press Cambridge, Massachusetts, London, England.
49. Yang, Y. (2019). Do Accruals earnings management constraints and intellectual capital efficiency trigger asymmetriccost behavior? Evidence from Australia. Australian Accounting Review, 29(1), 1-16. https://doi.org/10.1111/auar.12250.
50. Yükçü, S. & Özkaya, H. (2011). Cost behavior in Turkish firms: are selling, general and administrative costs and total operating costs “sticky”?. Muhasebe Bilim Dünyası Dergisi, 13(3), 1-27.
51. Zonatto, V. C. D. S., Magro, C. B. D., Sant’ana, C. F. & Padilha, D. F. (2018). Effects of economic growth in the behavior of sticky costs of companies belonging to BRICS Countries. Contaduría y Administración, 63(4),1-25.