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Article
Publication date: 7 October 2021

Jingbin Wang, Kexin Hou and Xuechang Zhu

The purpose of this study is to demonstrate the nonlinear relationship between inventory stickiness and productivity, with investment efficiency being a mediator and…

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17

Abstract

Purpose

The purpose of this study is to demonstrate the nonlinear relationship between inventory stickiness and productivity, with investment efficiency being a mediator and environmental dynamism being a moderator.

Design/methodology/approach

Using a large panel data collected from 1,479 Chinese listed manufacturing enterprises over the period from 2010 to 2020, this research employs the instrumental variable method combined with two-stage least squares estimators to explore the inverted-U-shaped relationship between inventory stickiness and productivity. Furthermore, the mediating role of investment efficiency and the moderating role of environmental dynamism are demonstrated via two three-model systems.

Findings

As its core, productivity initially increases with inventory stickiness until a turning point at the end of the sample, beyond which the incremental effect of inventory stickiness on productivity become negative. That is, an inverted U-shaped relationship between inventory stickiness and productivity is found to exist. Moreover, further mediated moderation analysis highlights that investment efficiency is a key mediator of this relationship, whereas environmental dynamism is a key moderator.

Practical implications

Managers ought to gauge carefully against the tradeoffs between inventory stickiness and productivity. In general, over 90% of manufacturing enterprises have great potential to increase productivity by implementing sticky inventory management. In addition, managers are suggested to place emphasis on investment management and environmental strategy.

Originality/value

This paper contributes to the current understanding about productivity by illustrating and verifying the nonlinear effect of sticky inventory management. It may be the first study to empirically demonstrate the mediating effect of investment efficiency and the moderating effect of environmental dynamism on the relationship between inventory stickiness and productivity.

Details

Journal of Manufacturing Technology Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-038X

Keywords

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Book part
Publication date: 28 September 2020

David L. Gray

Purpose – This article examines the operating lease cost stickiness characteristics exhibited by retail firms.Methodology/approachAnderson, Banker, and Janakiraman (2003

Abstract

Purpose – This article examines the operating lease cost stickiness characteristics exhibited by retail firms.

Methodology/approachAnderson, Banker, and Janakiraman (2003) laid important groundwork for the study of asymmetric cost behavior or cost stickiness. The authors found that a firm’s selling, general, and administrative costs (SG&A) costs increase more with a sales increase than those expenses decrease with an equivalent sales decline. Their findings provided avenues for many studies with differing focal variables; however, extant research has not explored the degree of cost stickiness associated with operating lease expenses. Recognizing the nature and magnitude of operating leases and the competitive and changing environment for retailers, this study adapts Anderson et al.’s (2003) model to provide insights into operating lease stickiness. The study uses archival financial data from 1997 through 2016 for specialty retail firms in testing the lease cost stickiness hypotheses.

Findings – The results of this study supported the hypotheses that operating lease expenses exhibit stickiness behavior and are relatively stickier than future lease commitments for retail firms.

Originality/value – By focusing on retail firms and related lease expenses, this study provides insights into the increasingly competitive retailer environment. This article’s findings will enhance understanding of how specialty retail firms’ managers react to reduced revenues. Finally, given recent authoritative pronouncements affecting accounting for leases and the significance of leasing transactions, research providing insights into cost behavior and managerial actions stands to make an important contribution to literature and practice.

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Book part
Publication date: 28 September 2020

Joanna Golden, Mark Kohlbeck and Zabihollah Rezaee

Purpose – The purpose of this study is to investigate whether a firm’s cost structure (specifically, its cost stickiness) is associated with environmental, social, and…

Abstract

Purpose – The purpose of this study is to investigate whether a firm’s cost structure (specifically, its cost stickiness) is associated with environmental, social, and governance (ESG) sustainability factors of performance and disclosure.

Methodology/approach – This study uses MCSI Research KLD Stats (KLD) and Bloomberg databases for the 13-year period from 2003 to 2015 in constructing ESG performance and disclosure variables, respectively. The authors adopt the general cost stickiness models from Anderson, Banker, and Janakiraman (2003) and Banker, Basu, Byzalov, and Chen (2016) to perform the analysis.

Findings – The authors find that a firm’s level of cost stickiness is positively associated with certain sticky corporate social responsibility (CSR)/ESG activities (both overall and when separately classified as strengths or concerns) but not with other nonsticky CSR activities. The authors also show that the association between cost stickiness and ESG disclosure is incrementally stronger for firms with CSR activities classified as sticky. Furthermore, the authors provide evidence that ESG disclosure is greater when both cost stickiness and the degree of sticky CSR activities increase. The authors show that when cost stickiness is high and CSR activities are sticky, management has incentives to increase CSR/ESG sustainability disclosure to decrease information asymmetry.

Originality/value – The findings present new evidence to understand how management integrates cost management strategies with various dimensions of sustainability performance decisions and show that not all ESG activities are equally effective when it comes to cost stickiness. The authors also demonstrate that increased sustainability disclosure helps reduce information asymmetry incrementally more when both costs are sticky and CSR activities are sticky.

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Article
Publication date: 28 December 2020

Yu Lin, Shuaishuai Zhang and Yingjie Shi

The purpose of this paper is to examine the impact of operational stickiness on product quality. Particularly, it analyzes the moderating effect of product diversification…

Abstract

Purpose

The purpose of this paper is to examine the impact of operational stickiness on product quality. Particularly, it analyzes the moderating effect of product diversification on the relationship between operational stickiness and product quality of exporting firms from China.

Design/methodology/approach

Using a sample of 3,567 exporting firms between 2002 and 2012 in China, this paper develops a fixed effect model to demonstrate the nonlinear relationship between operational stickiness and product quality.

Findings

Results show that operational stickiness has an inverted U-shaped impact on product quality, while inventory stickiness, property, plant and equipment (PPE) stickiness and labor stickiness are used to measure operational stickiness. Furthermore, the impact of operational stickiness on product quality is found to be moderated by product diversification.

Practical implications

Managers can achieve an optimal level of product quality by adjusting the level of operational stickiness. Firms with excessive operational stickiness should appropriately reduce the degree of stickiness to improve product quality. Besides, managers who focus on product quality should be cautious in adopting the product diversification strategy and be wary of the loss of product quality this strategy may cause.

Originality/value

This paper is the first study that has empirically validated the inverted U-shaped relationship between operational stickiness and product quality, and confirmed the moderating effect of product diversification on the relationship between operational stickiness and product quality. It provides a new idea to improve product quality by operational management.

Details

Journal of Manufacturing Technology Management, vol. 32 no. 2
Type: Research Article
ISSN: 1741-038X

Keywords

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Article
Publication date: 10 August 2020

Xuechang Zhu, Jingbin Wang, Bin Liu and Xiaoyi Di

Although the adoption of lean inventory management for performance improvement has been widely recognized, sticky inventory management is still a stopgap measure for new…

Abstract

Purpose

Although the adoption of lean inventory management for performance improvement has been widely recognized, sticky inventory management is still a stopgap measure for new small and medium enterprises (SMEs) against survival risks. The purpose of this paper is to demonstrate the nonlinear relationship between new SMEs inventory stickiness and venture survival by focusing on the moderating effects of environmental dynamism and financial constraints.

Design/methodology/approach

Classical moderating model is employed to investigate the effects of environmental dynamism and financial constraints on the relationship between inventory stickiness and venture survival. This study uses the accelerated failure time model for survival analysis and tests the relationships based on a large set of new manufacturing SMEs in China over the period from 1999 to 2007.

Findings

The main finding is that inventory stickiness has an inverted U-shaped impact on the likelihood of survival. However, the inflection point of this inverted U-shaped relationship lies at the end of the sample. Further moderation analysis indicates that environmental dynamism positively moderates the inverted U-shaped relationship between inventory stickiness and venture survival, while financial constraints negatively moderate this relationship.

Practical implications

Most new SMEs have great potential to increase the likelihood of survival by improving inventory stickiness before achieving effective lean inventory management. Sticky inventory management can help new SMEs achieve better survival in a dynamic environment. However, new SMEs that are financially constrained should prudently implement sticky inventory management.

Originality/value

This paper contributes to the existing understanding about the likelihood of SMEs survival by addressing the role of sticky inventory management. It may be the first study to empirically demonstrate the moderating effect of environmental dynamism and financial constraints on the inverted U-shaped relationship between inventory stickiness and venture survival.

Details

Journal of Manufacturing Technology Management, vol. 32 no. 2
Type: Research Article
ISSN: 1741-038X

Keywords

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Article
Publication date: 28 January 2020

Yosra Makni Fourati, Rania Chakroun Ghorbel and Anis Jarboui

This paper aims to investigate the impact of cost stickiness on conditional conservatism.

Abstract

Purpose

This paper aims to investigate the impact of cost stickiness on conditional conservatism.

Design/methodology/approach

The research sample consists of listed companies from 18 countries, using stock market indices of the BRICS, MIST, North Africa, USA and EU over the period ranging from 1997 to 2015. The authors use the firm-fixed effects method in the estimation of the models.

Findings

The results provide evidence of the existence of cost stickiness and conditional conservatism in the international context, using the Banker et al. (2016) model. They also argue that the conditional conservatism model (Basu, 1997) is overstated because it does not control for cost stickiness. In additional analyses, the authors conclude that the association between cost stickiness and accounting conservatism changes across country groups and across industries. The authors also document that the employee intensity and free cash-flow, as cost stickiness determinants, remain significant in the model including accounting conservatism. Moreover, the findings show that sticky cost behavior distorts inferences about standard demand drivers of conservatism such as leverage and size.

Originality/value

The findings are interesting and provide a better understanding of cost stickiness and conditional conservatism, and the interaction between these two phenomena in the international context, across country groups and across industries. To the best of the author’s knowledge, the study is the first one including free cash flow as a proxy for agency problem in the full model combining conservatism and cost stickiness models (Banker et al., 2016).

Details

Journal of Financial Reporting and Accounting, vol. 18 no. 1
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 19 November 2018

Mahdi Salehi, Nasrin Ziba and Ali Daemi Gah

The purpose of this paper is to investigate the relationship between financial reporting and cost stickiness in companies listed on the Tehran Stock Exchange.

Abstract

Purpose

The purpose of this paper is to investigate the relationship between financial reporting and cost stickiness in companies listed on the Tehran Stock Exchange.

Design/methodology/approach

Data of all Iranian manufacturing listed companies gathered for testing hypotheses during 2010–2016 and R statistical software are employed in order to analyzing data.

Findings

The results of this study indicate that there is a significant relationship between administrative, sale, material, labor and overhead costs and the financial reporting qualities of the companies under study.

Originality/value

The study focuses on relationship between financial reporting and cost stickiness in companies listed on the Tehran Stock Exchange, which is the first study of its type in Iran.

Details

International Journal of Productivity and Performance Management, vol. 67 no. 9
Type: Research Article
ISSN: 1741-0401

Keywords

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Article
Publication date: 6 February 2017

Awad Elsayed Awad Ibrahim and Amr Nazieh Ezat

The purpose of this paper is to provide further empirical evidence on the asymmetric cost behavior, cost stickiness, in an emerging country, Egypt, which lacks academic…

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2022

Abstract

Purpose

The purpose of this paper is to provide further empirical evidence on the asymmetric cost behavior, cost stickiness, in an emerging country, Egypt, which lacks academic research on this subject.

Design/methodology/approach

This study uses multiple regression analysis to analyze the behavior of selling, general, and administrative costs (SG&A) and cost of goods sold (CGS) individually and jointly using total costs (TC) for the period 2004-2011 for Egyptian-listed firms. In addition, the study compares the cost behavior three years prior to and after the application of the corporate governance code in Egypt in 2007.

Findings

The results indicate that asymmetric cost behavior is common among Egyptian-listed firms as their SG&A, CGS, and TC were found to be sticky during the study period. The application of the corporate governance code in Egypt was found to affect the nature of SG&A – the behavior of these costs changed from sticky before the code to anti-sticky after the application of the code. Moreover, the code was found to affect the magnitude of stickiness of both CGS and TC.

Originality/value

Greater awareness about cost behavior is important for emerging markets such as Egypt in order to protect investors’ interests and satisfy their information needs. To the best of our knowledge, this study is the first to provide evidence on cost stickiness in Egypt. Moreover, this study provides further evidence on the correlation between corporate governance and asymmetric cost behavior.

Details

Journal of Accounting in Emerging Economies, vol. 7 no. 1
Type: Research Article
ISSN: 2042-1168

Keywords

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Article
Publication date: 3 April 2017

Pamela Danese, Pietro Romano and Stefania Boscari

The purpose of this paper is to deal with the transfer of lean practices between different units in multi-plant organizations with different levels of adoption of lean…

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1258

Abstract

Purpose

The purpose of this paper is to deal with the transfer of lean practices between different units in multi-plant organizations with different levels of adoption of lean practices. It investigates how certain influential contextual variables – i.e. lean standards development, lean transfer team composition, source characteristics, recipient national environment and corporate lean programme deployment – can influence stickiness in the different phases of lean transfer process.

Design/methodology/approach

This paper opted for the multiple-case study method and examines six lean transfer projects at a dyadic level, that is, between a source and a recipient unit. The authors focussed on companies with headquarters in Europe with an attested experience in lean and which had recently and successfully transferred lean to subsidiaries in the USA and China.

Findings

The paper provides empirical insights about how stickiness in lean transfer projects changes during the initiation, implementation/ramp-up and integration phases. It identifies three lean transfer approaches (local, global, global and shared) and provides a set of propositions that explains how sociocultural traits of recipient environment (China vs USA) and lean transfer approach affect stickiness in each phase.

Originality/value

Literature on stickiness in lean transfer is at an early stage and very fragmented. Unlike previous contributions in the field, this paper provides an interpretation of the dynamics of stickiness in lean transfer at a micro-level (i.e. for each single phase of the lean transfer process). In addition, it develops a fuller understanding of the influence of context on lean transfer by adopting a configurational view, i.e. studying the joint effect of contextual variables on stickiness, which is a novelty in the lean transfer literature.

Details

International Journal of Operations & Production Management, vol. 37 no. 4
Type: Research Article
ISSN: 0144-3577

Keywords

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Article
Publication date: 10 July 2017

Ali Mohammadi and Parastoo Taherkhani

The purpose of this paper is to identify the relationship between organizational capital and the subsets of organizational capital (intellectual capital (IC)) cost and…

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1137

Abstract

Purpose

The purpose of this paper is to identify the relationship between organizational capital and the subsets of organizational capital (intellectual capital (IC)) cost and cost stickiness.

Design/methodology/approach

This study is causal correlational research. The data related to the company’s financial statements were collected using the Rahavard Novin Software and www.rdis.ir. In this study, panel data were run with the use of Eviews 8, in order to test the hypotheses. The ordinary least-squares method is used in this study to estimate the parameters of the model.

Findings

The results obtained from the study show that there is a significant relationship between organizational capital and cost stickiness. However, there is no significant difference between high and low rank in terms of organizational capital and cost stickiness. In addition, there is a significant difference between IC and cost stickiness. Moreover, there is no significant difference between the components of IC and cost stickiness. Also, IC has an effect on the intensity of the relationship between organizational capital and cost stickiness.

Originality/value

This study explores the relationship between organizational capital and the subsets of IC and cost stickiness. Independent variables used in this study include organizational capital, IC and its components in the Pulic model, i.e. the efficiency of capital employed, the efficiency of human capital and the efficiency of structural capital.

Details

Journal of Intellectual Capital, vol. 18 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

1 – 10 of over 2000