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Cost stickiness: A systematic literature review of 27 years of research and a future research agenda

Awad Elsayed Awad Ibrahim, Hesham Ali and Heba Aboelkheir

Journal of International Accounting, Auditing and Taxation, 2022, vol. 46, issue C

Abstract: Recent research has found that the cost response to an equivalent activity change is asymmetric. This study systematically reviews 80 research articles published in 36 journals during the last 27 years (1994–2020). Through three reviews, the study synthesizes, appraises, and extends knowledge on cost stickiness by covering prior studies’ themes, historical development, research impact, theories employed, research country, costs examined, and models used to capture cost stickiness. Despite the evidence on cost stickiness drivers, this study highlights several unexplored determinants that require further research, including culture, idle capacity management, business risks, auditor type, lobbying intensity, and CEO demographic characteristics. As the consequences of cost stickiness are largely unexplored, we call for more research examining its implications at the macro-economic level and for ubiquitous accounting techniques such as CVP analysis, pricing decisions, and cost estimation. Although prior studies have focused on non-financial companies and developed economies, examining cost stickiness in financial firms and developing economies could enrich the literature. As studies are either descriptive or rely primarily on a single theoretical perspective such as the agency and cost asymmetry theories, we call for research that adopts a multi-theoretical framework. Overall, the study discusses several research streams, identifies several literature gaps, and outlines a promising and detailed future research agenda.

Keywords: Cost behavior; Cost stickiness; Cost asymmetry; Management accounting (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.intaccaudtax.2021.100439

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