Does Social Capital Affect Asymmetric Cost Behaviour? Evidence from U.S. Counties

2017 ◽  
Author(s):  
Sven Hartlieb ◽  
Brigitte Eierle ◽  
Thomas R. Loy
Keyword(s):  
Social Capital ◽  
Cost Behaviour ◽  
Asymmetric Cost

Does community social capital affect asymmetric cost behaviour?

2020 ◽  
Vol 46 ◽  
pp. 100640 ◽  
Author(s):  
Sven Hartlieb ◽  
Thomas R. Loy ◽  
Brigitte Eierle
Keyword(s):  
Social Capital ◽  
Cost Behaviour ◽  
Asymmetric Cost

Do managers forecast asymmetric cost behaviour?

2018 ◽  
Vol 43 (4) ◽  
pp. 538-554 ◽  
Author(s):  
Michael E Bradbury ◽  
Tom Scott
Keyword(s):  
New Zealand ◽  
Local Government ◽  
Jel Classification ◽  
Cost Structure ◽  
Actual Behaviour ◽  
Asymmetric Relation ◽  
Cost Behaviour ◽  
Asymmetric Cost ◽  
Cost Stickiness

This article examines cost behaviour in a municipal (local government) setting and finds evidence of cost stickiness. We also find that costs are super-sticky as they increase even when revenues decrease. Municipals in New Zealand are required to produce forecasts, which allow us to investigate whether asymmetric cost behaviour is incorporated into forecasts. Forecast cost behaviour is found to be statistically indistinguishable from actual behaviour. In our tests, we control for asset intensity, employee intensity, expected demand, operating slack and past cost structure. The finding that the asymmetric relation between costs and revenues is incorporated into managerial forecasts suggests that cost stickiness is understood by managers rather than being merely a mechanistic outcome of cost structure. JEL Classification: M41, D24, H72

Asymmetric Cost Behaviour and Leverage: The Case of Shipping Industry

2020 ◽  
Author(s):  
Vassilios-Christos Naoum ◽  
Dimitrios Ntounis ◽  
Orestes Vlismas
Keyword(s):  
Shipping Industry ◽  
Cost Behaviour ◽  
Asymmetric Cost

Asymmetric Cost Behaviour and Earnings Quality in the European Context

2020 ◽  
Author(s):  
Apostolos A. Ballas ◽  
Dimosthenis (Dimosthenes) L. Hevas ◽  
Nikolaos I. Karampinis ◽  
Orestes Vlismas
Keyword(s):  
Earnings Quality ◽  
European Context ◽  
Cost Behaviour ◽  
Asymmetric Cost

The sticky cost phenomenon at the local government level: empirical evidence from Greece

2017 ◽  
Vol 18 (4) ◽  
pp. 445-463 ◽  
Author(s):  
Sandra Cohen ◽  
Sotirios Karatzimas ◽  
Vassilios-Christos Naoum
Keyword(s):  
Public Sector ◽  
Local Government ◽  
Empirical Evidence ◽  
Service Provision ◽  
Local Governments ◽  
Content Type ◽  
The Public ◽  
Cost Behaviour ◽  
Asymmetric Cost ◽  
Cost Stickiness

Purpose The purpose of this paper is to explore the asymmetric cost behaviour in Greek local governments. More precisely, it investigates whether municipality costs show stickiness or anti-stickiness behaviour after increases or decreases in the stream of their revenues. Design/methodology/approach The Anderson et al.’s (2003) approach is adapted to the public sector environment by using types of expenses and revenues typical to the local government setting. The data sample consists of 1,852 observations of Greek municipalities for the period 2002-2008. Findings The empirical evidence suggests that local government managers adjust resources related to administrative services faster when revenues decrease than when they rise (anti-stickiness cost behaviour). On the contrary, they adjust costs of service provision which are associated with core activities asymmetrically; more quickly for upward than for downward activity changes (cost stickiness behaviour). Research limitations/implications While prior studies examine the sticky cost phenomenon in the private sector, this study explores this phenomenon in the public sector through a data sample of municipalities. Local governments constitute an appealing and unique setting for the examination of asymmetric cost behaviour due to the existence of a strong political influence, which appears to affect rational economic decision making, and their non-profit character, which prevents them from acting in a business-like manner. Practical implications Understanding how cost stickiness works inside local understanding how cost stickiness works inside local governments, could lead to an understanding of its implications in periods of cutback measures. Decreases in municipalities’ subsidies and grants as a result of cutbacks in central government expenditures should not be expected to automatically result in symmetric savings in expenditures as corresponding increases in expenditures when revenues used to grow. At the same time, it might be difficult to achieve balanced budgets in municipalities when there is a considerable decrease in revenues, without having to make considerable adjustments to the input values, the output and the mix of services offered by them. Originality/value This study contributes to the accounting literature by expanding the understanding of how deliberate decisions influence the asymmetric cost behaviour in local governments, to different cost categories (administrative expenses and cost of service provision) and different revenue categories (grants, tax revenues and revenues from sales of goods and services).

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