Analysis of sticky costs: Croatian Evidence

摘要

Understanding cost behavior is one of the essential assumptions of successful managing of any company. However, traditional model of costs behavior doesn't take into account the way in which managerial intervention affects the resource-adjustment process. Therefore, in this study we test cost stickiness hypothesis according to which managers deliberately adjust the recourses in response to the changes in the volume. Direct implication of managerial deliberation is that costs increase more when volume rise than they decrease when volume is reduced by an equivalent amount i.e. costs are sticky. The investigation is conducted on the Croatian companies that operated in the food and beverage industry during the period from 1999 to 2009. The results of the analysis revealed that operating costs increase 0.61% for every 1% increase in revenue and decrease 0.52% per 1% decrease in revenue. However, the latter relationship was not statistically significant.