Cost management and working capital management: ebony and ivory in perfect harmony?

Terje Berg (), Emil Gustafsson and Ranik Raaen Wahlstrøm ()
Additional contact information
Terje Berg: Norwegian University of Science and Technology
Emil Gustafsson: Norwegian University of Science and Technology
Ranik Raaen Wahlstrøm: Norwegian University of Science and Technology

Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, 2024, vol. 35, issue 2, No 2, 207-233

Abstract: Abstract The aim of this paper is to empirically investigate the potential association between a firm’s cost behavior, characterized as cost stickiness or anti-stickiness, and working capital management (WCM), as measured by the working capital to total assets ratio and the trade cycle measures net trade cycle and cash conversion cycle. We measure cost stickiness using four widely accepted models and a sample of non-financial firms sourced from Compustat. Our findings highlight the significant influence of WCM on cost behavior. Specifically, we observe an inverse relationship between a firm’s WCM aggressiveness and both its cost stickiness and degree of cost adjustment. These relationships are consistent for both operating costs and the costs of goods sold.

Keywords: Cost stickiness; Cost asymmetry; Accounting; Controlling; Cost management; Working capital management (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s00187-024-00368-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jmgtco:v:35:y:2024:i:2:d:10.1007_s00187-024-00368-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/187

DOI: 10.1007/s00187-024-00368-3

Access Statistics for this article

Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung is currently edited by Thomas Günther

More articles in Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().