Labor adjustment costs and asymmetric cost behavior: An extension

Golden, Joanna; Mashruwala, Raj; Pevzner, Mikhail

doi:10.1016/j.mar.2019.07.004

Cited by 71 publications

(35 citation statements)

References 30 publications

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“…There is ongoing discussion of what one should include in a PAP; detailed discussions include Glennerster and Takavarasha (2013), David McKenzie's World Bank Research Group blog post, 29 and a template for PAPs by Alejandro Ganimian (2014). Ganimian's template may be particularly useful to researchers themselves when developing their own PAPs, and instructors may find it useful in their courses.…”

Section: Pre-analysis Plansmentioning

confidence: 99%

Transparency, Reproducibility, and the Credibility of Economics Research

Christensen

Miguel

2018

Journal of Economic Literature

287

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Abstract:There is growing interest in enhancing research transparency and reproducibility in economics and other scientific fields. We survey existing work on these topics within economics, and discuss the evidence suggesting that publication bias, inability to replicate, and specification searching remain widespread in the discipline. We next discuss recent progress in this area, including through improved research design, study registration and pre-analysis plans, disclosure standards, and open sharing of data and materials, drawing on experiences in both economics and other social sciences. We discuss areas where consensus is emerging on new practices, as well as approaches that remain controversial, and speculate about the most effective ways to make economics research more credible in the future. 1 We thank the editor Steven Durlauf and four anonymous referees for useful comments.

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Section: Pre-analysis Plansmentioning

confidence: 99%

Transparency, Reproducibility, and the Credibility of Economics Research

Christensen

Miguel

2018

Journal of Economic Literature

287

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“…According to Anderson et al (2003), the degree of cost asymmetry is affected by various economic factors. In this study we use the following regression specifications to test H1 where Equation (3) below is a comprehensive model that incorporates all the three‐way, two‐way and standalone variables following the recent literature on cost asymmetry (Golden, Mashruwala, & Pevzner, 2020; Kim, Lee, & Park, 2019; Xu & Zheng, 2018).

LN ([], \frac{{OC}_{t}}{{OC}_{t - 1}}) = β_{0} + β_{1} LN ([], \frac{{SALE}_{t}}{{SALE}_{t - 1}}) + β_{2} DECDUM + β_{3} DECDUM * LN ([], \frac{{SALE}_{t}}{{SALE}_{t - 1}}) + β_{4} DM + β_{5} DM * LN ([], \frac{{SALE}_{t}}{{SALE}_{t - 1}}) + β_{6} DM * DECDUM + β_{7} DM * DECDUM * LN ([], \frac{{SALE}_{t}}{{SALE}_{t - 1}}) + \sum_{l = 8}^{12} β_{l} {ECONVAR}_{l, t} * LN ([], \frac{{SALE}_{t}}{{SALE}_{t - 1}}) + \sum_{m = 13}^{17} β_{m} {ECONVAR}_{m, t} * DECDUM + \sum_{n = 18}^{22} β_{n} {ECONVAR}_{n, t} * DECDUM * LN ([], \frac{{SALE}_{t}}{{SALE}_{t - 1}}) + \sum_{o = 23}^{27} β_{o} {ECONVAR}_{o, t} + Fixed effect + ε \dots

…”

Section: Methodsmentioning

confidence: 99%

“…According to Anderson et al (2003), the degree of cost asymmetry is affected by various economic factors. In this study we use the following regression specifications to test H1 where Equation 3below is a comprehensive model that incorporates all the three-way, two-way and standalone variables following the recent literature on cost asymmetry (Golden, Mashruwala, & Pevzner, 2020;Kim, Lee, & Park, 2019;Xu & Zheng, 2018).…”

Section: Cost Of Capitalmentioning

confidence: 99%

Debt maturity structure and cost stickiness

Habib

Costa

2020

J Corp Accounting Finance

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This paper investigates the association between debt maturity structure and cost stickiness. One view in the cost stickiness literature suggests that managers deliberately continue to expand resources for their own private benefit, despite a decrease in the activity level. We examine whether short‐maturity debt constrains such opportunistic cost stickiness. We find evidence supporting this hypothesis. We further document that availability of free cash flows, earnings management incentive, and the structure of executive compensation all exacerbate the agency problem‐induced cost stickiness, but that short‐maturity debt constrains those sources of cost stickiness. We contribute to the scant body of empirical research that explores the potential factors that could attenuate cost stickiness.

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“…As the adjustment cost increases, the cost stickiness increases since rational managers consider keeping idle resources less costly than eliminating and restoring those resources in case of demand recovering (Banker, Ciftci, & Mashruwala, 2006;Rouxelin, Wongsunwai & Yehuda, 2017). Studies provide several determining factors of adjustment costs whether on firm-level, such as employee or assets intensity (e.g., ABJ, 2003;Subramaniam & Watson, 2016;Weidenmier & Subramaniam, 2003), level of employees skills (e.g., Golden, Mashruwala & Pevzner, 2019), firm size (e.g., Dalla Via, & Perego, 2014), and engagement in CSR activities (e.g., Habib & Hasan, 2019) or a country level, such as trade unions bargaining power (e.g., Banker & Chen, 2007), employment protection legislation (e.g., Banker, Byzalov & Chen, 2013;Dierynck, Landsman & Renders, 2012) and employment rate (e.g., Golden et al, 2019).…”

Section: The Existence Of Acbmentioning

confidence: 99%

“…Based on these two arguments, among others, several studies report the existence of ACB for different cost elements including selling, general and administrative costs SGA (e.g., Banker et al, 2006;De Medeiros & Costa, 2004), cost of goods sales COGS (e.g., Ibrahim & Ezat, 2017;Weidenmier & Subramaniam, 2003), operating costs OC (e.g., Banker et al, 2013), and labor cost (e.g., Dalla Via, & Perego, 2014;Dierynck, Landsman, & Renders, 2012), and at different study levels including department-level (e.g., Balakrishnan & Gruca, 2008), firm-level (e.g., Pichetkun & Panmanee, 2012;Dalla Via, & Perego, 2014), industry level (e.g., Golden et al, 2019;Weidenmier & Subramaniam;, and at country-level (e.g., Banker & Chen, 2007;Banker et al, 2013).…”

Section: The Existence Of Acbmentioning

confidence: 99%

Asymmetric Cost Behavior Across Life Cycle Stages

Abdelhay

Youssef²,

Awad

2021

ijafr

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The traditional model of cost behavior has been criticized for its symmetric cost behavior assumption. A new model has been proposed assuming that costs respond differently to upward and downward activity changes. The main objectives of this paper are to investigate the existence, degree, and nature of asymmetric cost behavior (ACB) phenomenon and examine how the organization life cycle (OLC) affects this phenomenon in the context of Egypt. The current study achieves these objectives by employing multiple regression to explore the behavior of cost of goods sold (COGS), selling, general and administrative cost (SGA), and total cost (TC) for 1577 firm-year observations (99 manufacturing firms) during the period from 2000 to 2019. The results demonstrate that all three cost proxies (COGS, SGA, and TC) are sticky with the highest degree of stickiness to TC. In addition, OLC is a conditional factor that affects how costs behave in response to change in activity level. Consistent with theoretical propositions, both COGS and TC exhibit anti-stickiness behavior for firms in the introduction stage and stickiness behavior for firms in the growth, mature, and shakeout/decline stages. However, SGA is only sticky for firms in the mature stage. However, the hypotheses related to asymmetric behavior of SGA were rejected for firms in the introduction, growth, and shakeout/decline stages.

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Labor adjustment costs and asymmetric cost behavior: An extension

Cited by 71 publications

References 30 publications

Transparency, Reproducibility, and the Credibility of Economics Research

Transparency, Reproducibility, and the Credibility of Economics Research

Debt maturity structure and cost stickiness

Asymmetric Cost Behavior Across Life Cycle Stages

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