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An Analysis of the Factors Influencing the Adoption of Activity Based Costing (ABC) in the Financial Sector in Jamaica

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  • Phillip C. James

    (College of Business and Management, School of Business Administration, University of Technology, Jamaica., 237 Old Hope Road,Kingston 6, Jamaica)

Abstract

Financial institutions are increasingly operating in a highly competitively environment and therefore cost management has become an imperative. This paper investigates the factors influencing the adoption of activity-based costing (ABC) methodology within the financial sector in Jamaica. Quantitative analysis was done using the generalized linear logistic regression model. The results show that there are three main factors that are statistically significant in the decision to implement an ABC system, these are: companies perception of the ability of ABC to assist in cost control, the proportion of overhead to total cost and finally, the action of competitors, that is, whether a competitor adopts the ABC methodology

Suggested Citation

  • Phillip C. James, 2013. "An Analysis of the Factors Influencing the Adoption of Activity Based Costing (ABC) in the Financial Sector in Jamaica," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 3(7), pages 8-18, July.
    • Handle: RePEc:mir:mirbus:v:3:y:2013:i:7:p:8-18
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    References listed on IDEAS

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    1. Pierre-Laurent Bescos & Éric Cauvin & Maurice Gosselin, 2002. "Activity-based costing and activity-based management : A comparison of the practices in Canada and in France," ACCRA, Association francophone de comptabilité, vol. 8(3), pages 229-244.
    2. Ildikó Réka CARDOS & Stefan PETE, 2011. "Activity-based Costing (ABC) and Activity-based Management(ABM)Implementation – Is This the Solution for Organizations to Gain Profitability?," Romanian Journal of Economics, Institute of National Economy, vol. 32(1(41)), pages 151-168, June.
    3. Ralph C. Kimball, 1997. "Innovations in performance measurement in banking," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 23-38.
    4. Pierre-Laurent Bescos & Éric Cauvin & Maurice Gosselin, 2002. "Activity-based costing and activity-based management : A comparison of the practices in Canada and in France," Comptabilité - Contrôle - Audit, Association francophone de comptabilité, vol. 8(3), pages 229-244.
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    Cited by:

    1. Safaa Ibrahim Mahmood Al-Nuaim & Safaa Ibrahim Mahmood Al-Nuaim & Safaa Ibrahim Mahmood Al-Nuaim & Rapiah Mohamed & Jamal Mohammed Esmail Alekam, 2017. "The Link between Information Technology, Activity-based Costing Implementation and Organizational Performance," International Review of Management and Marketing, Econjournals, vol. 7(1), pages 452-457.

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