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Cost Stickiness in Australia: Characteristics and Informativeness

Project Member(s): Shan, Y., Bugeja, M.

Funding or Partner Organisation: Accounting and Finance Association of Australia and New Zealand (Accounting & Finance Association of Australia and New Zealand - Research Grants)

Start year: 2012

Summary: Traditional accounting models assume that variable costs change proportionally and symmetrically with changes in revenues, but recent empirical research presents evidence of asymmetric cost behaviour (i.e., cost stickiness). This project aims to provide the first comprehensive examination of cost stickiness using a large sample of Australian firms. It explores Australian cost stickiness in terms of time-series patterns, industry characteristics and usefulness in predicting future profits.

FOR Codes: Financial Accounting, Finance Services, Investment Services (excl. Superannuation)