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| Date: |
February 23, 2011 (Wednesday) |
| Time : |
11:00am - 12:30pm |
| Language : |
English |
| Venue : |
Room 602, Meng Wah Complex, The University of Hong Kong |
| Presented By : |
Prof. Ramji Balakrishnan, Director, RSM McGladrey Institute of Accounting Education and Research, Carlson-KPMG Professor of Accounting, The University of Iowa |
| Seminar title : |
Cost Structure and Sticky Costs |
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| Abstract: |
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Beginning with Anderson, Banker, and Janakiraman (2003), a rapidly growing literature attributes the short-run asymmetric cost response to activity changes (i.e., sticky costs) as resulting from managerial choices. We show that fixed costs induce non-stationarity in the elasticity of Sales, General and Administrative costs, affecting the interpretation of estimates from the standard specification used in the literature. We develop suggestions for how future research might control for the effects of cost structure. Empirically, we find that cost structure confounds results usually interpreted as reflecting short-run managerial actions. Further, after adjusting for the effects of fixed costs, we find that the results are unstable across alternate sub-samples.
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| All Interested are Welcomed: |
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Request for presentation papers or enquires, please contact:
Miss Panda Tsu
Tel: 2241 5050 or pandatsu@business.hku.hk
The papers will also be available on the presentation. |
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