Cost Stickiness in Brazilian Firms

Otavio De Medeiros () and Patricia de Souza Costa
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Patricia de Souza Costa: Universidade de Brasilia, Brazil

Finance from University Library of Munich, Germany

Abstract: Conventional cost accounting assumes that the relation between cost and volume is symmetric for volume increases and decreases. We test an alternative model where costs increase more when activity rises than they decrease when activity falls by an equivalent amount. We find, for a sample of Brazilian firms that selling, general, and administrative costs increase 0.59% per 1% increase in sales but decrease only 0.32% per 1% decrease in sales. We test several hypotheses about the properties of sticky costs and how the stickiness of SG&A costs changes with firm circumstances and we confirm cost stickiness for Brazilian firms.

Keywords: cost accounting; sticky costs; Brazilian firms (search for similar items in EconPapers)
JEL-codes: G (search for similar items in EconPapers)
Pages: 14 pages
Date: 2004-12-15
New Economics Papers: this item is included in nep-com and nep-fin
Note: Type of Document - pdf; pages: 14
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpfi:0412021

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