JEL Classification System
M41
Abstract
Recent research shows that studying the traditional cost behavior within a firm may not be sufficient to fully understand the elements that influence management behavior. Studies have pinpointed a cost-related issue called “cost asymmetry,” which has gained the widespread name of “cost stickiness.” Researchers have explored factors that cause cost stickiness through three theories: adjustment cost theory, agency theory, and political process theory. This study seeks to determine the sticky cost behavior of three costs, namely cost of goods sold, selling, general and administrative expenses, and total cost of goods sold and selling, general and administrative expenses. It also aims to examine if the adjustment costs, political costs, and agency costs, otherwise referred to as latent variables impact cost stickiness. Publicly-listed firms in the Philippines are assessed from the years 2009 to 2019. Findings show that the stickiness of all three costs without latent variables was significant. No latent variable had a significant effect on cost of goods sold. Only adjustment costs and political costs had a significant impact on both selling, general, and administrative expenses and total costs. However, political costs decreased the cost stickiness of selling, general and administrative expenses but increased the stickiness of the total costs.
Recommended Citation
Catalig, Angela Bianca N.; Decena, Charles Justin M.; Franco, Maria Denise A.; Ventura, Ma. Colleen L.; and Legaspi, Joy Lynn R.
(2022)
"The Impact of Adjustment, Agency, and Political Costs on Cost Stickiness of Publicly-listed Companies in the Philippines from 2009-2019,"
DLSU Business & Economics Review: Vol. 32:
No.
1, Article 11.
DOI: https://doi.org/10.59588/2243-786X.1179
Available at:
https://animorepository.dlsu.edu.ph/ber/vol32/iss1/11
Included in
Accounting Commons, Economics Commons, Finance and Financial Management Commons, Marketing Commons
