Evidence of different costs behavior (sticky costs) in multiple industries of Argentina

Florencia

Congreso; 12th World Congress of Accounting Educators and Researchers; 2014

IAAER and the University of Florence.

An assumption made in traditional cost accounting books is that variable costs change proportionately with revenues. Recent studies on sticky costs challenged this assumption (Anderson et al., 2003). This study shows that sticky costs are observed in all Argentinean industries in the period 2004-2012 except for firms operating in the Agricultural sector. Total costs are sticky because the magnitude of the increase associated with an increase in activity level is larger than the magnitude of the fall associated with a decrease in activity level. These results suggest that industry specific cost structure and macroeconomic climate are valid explanations for cost behavior of firms operating in emerging economies.