Understanding Cost Management: What Can We Learn from the Evidence on 'Sticky Costs'? (original) (raw)

This paper investigates the concept of 'sticky costs'—the phenomenon where the decrease in selling, general, and administrative (SG&A) costs associated with falling sales is less than the increase in costs tied to rising sales. By re-evaluating previous research findings, the authors argue that existing empirical tests may not adequately support the hypothesis that managerial actions drive cost management decisions. The paper questions the validity of the methods and data used in past studies, asserting a lack of consistent evidence for sticky costs across different types of expenses. Suggestions are made for future research to better explore the connections between managerial behavior and observed cost changes.