Cost Stickiness and Anti-Cost Stickiness of Non- Manufacturing Costs in Iranian Firms

Abstract

Cost stickiness denotes the asymmetric response of costs to sales increasesversus sales decreases. In this paper, we also consider the concept of costanti-stickiness. Cost anti-stickiness happens when the decrease of costs incase of a fall in sales is more than the increase of costs due to an equal rise insales. This phenomenon happens because of existence of optimisticmanagers in past years and inefficient stickiness cause of sales volatilityagainst manager’s expectation.This paper examines the cost stickiness and anti-cost stickiness of nonmanufacturingcosts in Iranian firms using panel data analysis. The sampleincludes 229 publicly-traded firms listed in Tehran Stock Exchange. Usingdata for 2012-2015, the results showed that not only do the nonmanufacturingcosts have stickiness behavior but also they have antistickinessbehavior that occurs due to the changes in the sales in the previousyears.

Keywords

• keywords: cost stickiness
• cost anti-stickiness
• non-manufacturing cost