Prior literature on cost and cost behavior has already established the relationship
between costs and firms’ activity. The phenomenon where costs increase more with the
increase of firms’ activity rather than decreased when there is an equivalent decrease
on active have determined as Cost Stickiness. Sticky Costs This sticky cost behavior
renounces the classical model which accepts that expenses carry on symmetrically for
production volume fluctuations. In this research we are trying to investigate and draw
conclusions about cost behavior in Greek listed firms. The dataset is compromised by
all Greek listed Firms that are listed in the Athens Stock exchange given the timeframe
of ten years from 2008 to 2018. Our assumptions are that cost in Greek listed firms is
behave as sticky (operating costs fluctuate non-symmetrically as the sales revenue
fluctuates), but in longer time of periods under scrutiny the phenomenon of cost
stickiness tend to be smoother or disappear. Following the previous literature, we
assume that this is due to the better information managers gather through longer time
frames. Additionally, cost stickiness is a phenomenon that is greatly influenced by
market fluctuations. When firms sustain larger drops in revenues, the costs are
becoming less sticky, helping somehow the progress of the firms. The majority of Greek
listed firms faced a high deterioration in revenues during the period under scrutiny thus
make us expect that the phenomenon tends to be lower. Finally, we test the sample of
firms in terms of the firms’ ownership structure and more specific the connection of
family ownership and the phenomenon of cost stickiness. All three hypotheses that we
are forming are rejected or confirmed accordingly.
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