TY  - JOUR
AB  - Purpose Cost behaviour literature is expanding its reach beyond developed economies; however, there is limited knowledge about its causes in emerging economies. This is an exploratory study of sticky costs behaviour determinants in Argentina, a country with periodic political and economic turbulence. The purpose of this paper is to test the effect of GDP, asset intensity, industry and cost type in an inflationary context.Design/methodology/approach Anderson et al. (2003) empirical regression (ABJ model) is replicated in Argentina with 667 observations from 96 firms between the years 2004 and 2012. It uses panel data and variables are defined as change rates between two periods. The sample excludes financial and insurance firms. It tests if sticky cost behaviour changes in periods of macroeconomic deceleration, or in firms belonging to industries with different asset intensity levels, or among different cost types.Findings The analysis shows that costs are sticky in Argentina, where a superb economic outlook is required to delay cutting resources or increasing costs. Cost behaviour is affected by social and cultural factors, such as labour inflexibility driven by powerful unions and not by protective employment laws, asset intensity (industry) and macroeconomic environment. Results suggest that costs are sticky for aggregate samples, but not for all subsamples.Practical implications Administrative costs are sticky when GDP grows; but when growth declines, managers or firms do not delay cost cutting actions. Some subsamples are extreme cases of stickiness while others are anti-sticky, casting some doubt on the usefulness of sticky costs empirical tests applied to country-wide samples. Careful selection of observations for sticky costs studies in emerging economies is critical.Originality/value Evidence from previous studies show that on average costs are remarkably sticky in Argentina; this study shows that cost reduction activities occur faster but are not persistent enough to change the aggregated long-term results of cost stickiness in the presence of moderate to high inflation. The study contributes to the literature by suggesting that observations used in sticky costs studies from emerging economies might be mainly from positive macroeconomic environments, might have skewed results due to extreme cases of stickiness or might be distorted by inflation.
VL  - 10
IS  - 1
SN  - 2042-1168
DO  - 10.1108/JAEE-05-2018-0050
UR  - https://doi.org/10.1108/JAEE-05-2018-0050
AU  - Stimolo María Inés
AU  - Porporato Marcela
PY  - 2020
Y1  - 2020/01/01
TI  - How different cost behaviour is in emerging economies? Evidence from Argentina
T2  - Journal of Accounting in Emerging Economies
PB  - Emerald Publishing Limited
SP  - 21
EP  - 47
Y2  - 2024/04/19
ER  -