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Sticky Selling, General, And Administrative Cost Behavior And Its Changes In Japan

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  • Daoping (Steven) He
  • Jenny Teruya
  • Takashi Shimizu

Abstract

This study examines whether Japanese firms’ selling, general, and administrative costs are sticky. We also investigate the determinants of cost stickiness in Japan and test whether Japanese managers changed their cost behavior after the stock market collapse in 1990. We find that similar to US firms, Japanese firms also demonstrate sticky selling, general, and administrative cost behavior; however, the stickiness of selling, general, and administrative costs in Japan is less likely to be adjusted due to temporary changes in their performance. We also find that there is a significant decrease in the magnitude of stickiness in Japan after the asset bubble burst, showing that Japanese managers adjusted their cost behavior in the post-bubble era.

Suggested Citation

  • Daoping (Steven) He & Jenny Teruya & Takashi Shimizu, 2010. "Sticky Selling, General, And Administrative Cost Behavior And Its Changes In Japan," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 4(4), pages 1-10.
    • Handle: RePEc:ibf:gjbres:v:4:y:2010:i:4:p:1-10
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    References listed on IDEAS

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    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    2. Prowse, Stephen D., 1990. "Institutional investment patterns and corporate financial behavior in the United States and Japan," Journal of Financial Economics, Elsevier, vol. 27(1), pages 43-66, September.
    3. Mark C. Anderson & Rajiv D. Banker & Surya N. Janakiraman, 2003. "Are Selling, General, and Administrative Costs “Sticky”?," Journal of Accounting Research, Wiley Blackwell, vol. 41(1), pages 47-63, March.
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    Cited by:

    1. Vinícius Costa da Silva Zonatto & Cristian Baú Dal Magro & Camila Freitas Sant´Ana & Daniel Fernando Padilha, 2018. "Effects of economic growth in the behavior of sticky costs of companies belonging to BRICS countries," Contaduría y Administración, Accounting and Management, vol. 63(4), pages 33-34, Octubre-D.
    2. Shohei Nagasawa, 2018. "Asymmetric cost behavior in local public enterprises: exploring the public interest and striving for efficiency," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 29(3), pages 225-273, December.
    3. Flávia Renata de Souza & Altair Borgert & Leonardo Flach, 2018. "Payroll exemption impact on the behavior of costs in BM&FBovespa civil construction sector," Contaduría y Administración, Accounting and Management, vol. 63(3), pages 5-6, Julio-Sep.

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    More about this item

    Keywords

    Cost behavior; Japanese firms;

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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