Cost Stickiness: Behavior and Factors

DOI

10.2991/aebmr.k.200309.032How to use a DOI?

Keywords

selling, general and administrative cost, capital intensity ratio, employee intensity ratio, free cash flow, sticky cost

Abstract

The objective of the study is to analyse the sticky cost behaviour and the factors that affect the cost stickiness on manufacturing companies listed in Indonesia Stock Exchange. The behavior of sticky cost in this study is found by analyzing selling, general and administrative costs which are categorized into several industry groups to observe the annual degree of sticky cost of each group of industry. In addition, the factors that affect the cost stickiness are capital intensity ratio, employee intensity ratio, incentive management as measured by free cash flow, and the control variable, firm size. The method used in this study is multiple linear regression analysis using the equation as measured by Anderson, Banker and Janakiraman. The sample is determined by purposive sampling method with the number of samples of 97 companies during the period 2014-2018. The results of this study are that sticky cost behavior occurs in all manufacturing companies in Indonesia. The largest and smallest degrees of sticky cost occur in animal feed and other sectors, which is as proof that the company of such sectors has inconsistent management in supervising and controlling selling, general and administrative costs. Furthermore, the results of the factors affecting the cost stickiness show that: 1) capital intensity ratio does not influence the degree of cost stickiness, 2) employee intensity ratio affects the degree of cost stickiness, 3) free cash flow does not affect the degree of cost stickiness, and 4) firm size of control variable affects the degree of cost stickiness.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Lies Zulfiati
AU  - Rimi Gusliana
AU  - Siti Nuridah
PY  - 2020
DA  - 2020/03/12
TI  - Cost Stickiness: Behavior and Factors
BT  - Proceedings of the Annual International Conference on Accounting Research (AICAR 2019)
PB  - Atlantis Press
SP  - 143
EP  - 145
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200309.032
DO  - 10.2991/aebmr.k.200309.032
ID  - Zulfiati2020
ER  -