scholarly journals Co-CEOs and Asymmetric Cost Behavior

2019 ◽  
Vol 11 (4) ◽  
pp. 1046 ◽  
Author(s):  
Jiyeon Lee ◽  
Jin-Ha Park ◽  
Jiwon Hyeon
Keyword(s):  
Corporate Governance ◽  
Foreign Ownership ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Cost Behavior ◽  
Corporate Governance Mechanism ◽  
Asymmetric Cost ◽  
External Governance ◽  
Cost Stickiness ◽  
Asymmetric Cost Behavior

This study investigates the effect of co-CEO structure on asymmetric cost behavior. A firm’s cost behavior reflects managers’ decision making about resources, which can be influenced by various factors. One of them relates to a manager’s decision to inefficiently reallocate their company’s resources when sales decline in pursuit of their incentives for empire-building and disincentives for downsizing. These inefficient resource allocations may result in asymmetric cost behavior, and ultimately be harmful to a firm’s sustainability. We consider the co-CEO structure as an alternative corporate governance mechanism that prevents managers from making inappropriate decisions. By doing so, we investigate whether the degree of cost stickiness differs between co-CEO and single-CEO structures, and whether the former complements external governance mechanisms, particularly foreign ownership, in mitigating cost stickiness. We analyze data from Korean listed companies for 2000–2013, and find that the cost stickiness is lower in the co-CEO structure than in the single-CEO structure. Thus, the co-CEO structure works as an alternative corporate governance mechanism to control the agency problem by inducing mutual monitoring among co-CEOs. Furthermore, the reduction in cost stickiness is greater for firms with higher foreign ownership, indicating that the co-CEO structure complements external governance mechanisms.

scholarly journals Sticky cost behavior: evidence from Egypt

2017 ◽  
Vol 7 (1) ◽  
pp. 16-34 ◽  
Author(s):  
Awad Elsayed Awad Ibrahim ◽  
Amr Nazieh Ezat
Keyword(s):  
Corporate Governance ◽  
Information Needs ◽  
Academic Research ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Governance Code ◽  
Cost Behavior ◽  
Asymmetric Cost ◽  
Cost Stickiness ◽  
Asymmetric Cost Behavior

Purpose The purpose of this paper is to provide further empirical evidence on the asymmetric cost behavior, cost stickiness, in an emerging country, Egypt, which lacks academic research on this subject. Design/methodology/approach This study uses multiple regression analysis to analyze the behavior of selling, general, and administrative costs (SG&A) and cost of goods sold (CGS) individually and jointly using total costs (TC) for the period 2004-2011 for Egyptian-listed firms. In addition, the study compares the cost behavior three years prior to and after the application of the corporate governance code in Egypt in 2007. Findings The results indicate that asymmetric cost behavior is common among Egyptian-listed firms as their SG&A, CGS, and TC were found to be sticky during the study period. The application of the corporate governance code in Egypt was found to affect the nature of SG&A – the behavior of these costs changed from sticky before the code to anti-sticky after the application of the code. Moreover, the code was found to affect the magnitude of stickiness of both CGS and TC. Originality/value Greater awareness about cost behavior is important for emerging markets such as Egypt in order to protect investors’ interests and satisfy their information needs. To the best of our knowledge, this study is the first to provide evidence on cost stickiness in Egypt. Moreover, this study provides further evidence on the correlation between corporate governance and asymmetric cost behavior.

scholarly journals Board characteristics and asymmetric cost behavior: evidence from Egypt

2018 ◽  
Vol 31 (2) ◽  
pp. 301-322 ◽  
Author(s):  
Awad Elsayed Awad Ibrahim
Keyword(s):  
Corporate Governance ◽  
Emerging Economies ◽  
Cost Model ◽  
Ordinary Least Squares ◽  
Content Type ◽  
Board Characteristics ◽  
Cost Behavior ◽  
Asymmetric Cost ◽  
Cost Stickiness ◽  
Asymmetric Cost Behavior

PurposeThis paper aims to provide further evidence on asymmetric cost behavior (cost stickiness) from one of the emerging economies, Egypt. The study provides empirical evidence on the potential impact of corporate governance on nature and extent of asymmetric cost behavior.Design/methodology/approachThe study estimates three multiple regression models using ordinary least squares to examine the behavior of cost of goods sold (COGS) and the influence of board characteristics and other control variables in a sample of 80 listed companies during 2008-2013.FindingsThe analysis provides evidence on COGS asymmetric behavior, where the analysis finds that COGS increases by 1.05 per cent but decrease by 0.85 per cent for an equivalent activity change of 1 per cent, which contradicts the traditional cost model assumption that costs behave linearly. In addition, the analysis finds that firm-year observations with larger boards, role duality and higher non-executives ratio exhibit greater cost asymmetry than others, while firms-years with successive sales decrease, higher economic growth and institutional ownership found to exhibit lower cost stickiness.Originality/valueThis study contributes by providing evidence on asymmetric cost behavior from one of emerging economies. Further, the study extends the very few studies on the relationship between corporate governance and asymmetric cost behavior. In addition, the study contributes by examining a different cost type (COGS) that has been examined by very few studies. Finally, the study provides an evaluation of the 2007 Egyptian Corporate Governance Code in the cost behavior context.

scholarly journals PENGARUH MEKANISME CORPORATE GOVERNANCE DAN UKURAN PERUSAHAAN TERHADAP KINERJA KEUANGAN (Survei Pada Perusahaan Manufaktur yang terdaftar di BEI )

2018 ◽  
Vol 2 (2) ◽  
pp. 010-031
Author(s):  
Animah Animah ◽  
Lukman Effendy ◽  
Alamsyah M. Thahir ◽  
Erna Widiastuty
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Firm Size ◽  
Sampling Technique ◽  
Partial Least Square ◽  
Least Square ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Corporate Governance Mechanism

The purpose of this research is to examine the effect of corporate governance mechanisms,  firm size of financial performance. The Population of this research is the company manufacturing  in BEI. The sampling technique used is purposive sampling. The analytical tool used is using partial least  square program. The independent variables in this research are corporate governance mechanism,  firm size  while the dependent variable is the performance of the financial. The result of the research shows that firm size  influence to financial performance, while other variables such as corporate governance mechanisms have no effect negative  to financial performance.

Corporate Governance in Islamic Banks

2021 ◽  
pp. 322-337
Author(s):  
Sami Ben Mim ◽  
Yosra Mbarki
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Supervisory Board ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Transmission Channels ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors ◽  
Corporate Governance Mechanism

This study investigates the efficiency of the Shariah supervisory board as a corporate governance mechanism in Islamic banks. The authors mainly seek to examine the effect of the Shariah board's composition (size and academic background of its members) on the performance of Islamic banks. They also try to highlight the transmission channels explaining this effect, and compare the efficiency of the Shariah board with that of traditional corporate governance mechanisms, namely the board of directors. The empirical investigation is based on a sample of 72 Islamic banks from 19 countries. Estimation results suggest that the Shariah board positively affects the Islamic banks performance through the number of Islamic Shariah scholars. This effect is mainly due to the size and cost transmission channels. These results are robust to different performance measures. On the other hand, results show that the board of directors' size produces a positive effect on a bank's performance, offering evidence for complementarity between traditional and Islamic governance mechanisms.

scholarly journals The Mediating effect of Corporate Social Responsibility and Dividend Policy on the Effect of Corporate Governance Mechanism on Firm Value among Publicly Listed Companies in the Philippines

2019 ◽  
Vol 8 (6S) ◽  
pp. 602-605
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
The Philippines ◽  
Mediating Effect ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanism ◽  
Corporate Social

— Corporate social obligation has become an vital part of commercial company exercise during the last decade or so. In fact, many businesses dedicate a phase of their annual reports and company internet web sites to CSR activities, illustrating the importance they attach to such sports. On the opposite hand, Good company governance exercise has a number of observable outcomes on economic results of the company. Corporate governance recommendations are strongly associated with income quality or the quantity to which the firm’s disclosed economic basic performance reflects its right performance. This have a look at investigates in the main the mediating effect of Corporate Social Responsibility and Dividend Policy on the impact of corporate governance mechanism on firm value amongst publicly listed organizations inside the Philippines. It examined forty seven publicly indexed businesses inside the Philippines for a four-yr period from 2013 to 2016. A structural equation modeling (SEM) approach changed into used for the evaluation. Results show that Corporate Social Responsibility does not act as a mediating variable with regards to company governance mechanisms to firm rate. It manner that CSR does now not act as a variable so one can give a boost to corporation governance mechanisms that during developing the charge of the commercial enterprise corporation. Also, dividend coverage does no longer act as mediating variable at the effect of enterprise governance mechanisms on company value. Finally, the end result confirmed that there is a terrible but large effect of dividend price on business enterprise value.

Discussion of Asymmetric Cost Behavior—Sticky Costs: Expenses versus Cash Flows

2014 ◽  
Vol 26 (2) ◽  
pp. 81-90 ◽  
Author(s):  
Efrat Shust ◽  
Dan Weiss
Keyword(s):  
Cash Flows ◽  
Economic Costs ◽  
Comprehensive Review ◽  
Cost Behavior ◽  
Asymmetric Cost ◽  
Asymmetric Costs ◽  
The Asymmetry ◽  
Cost Stickiness ◽  
Asymmetric Cost Behavior

ABSTRACT This note highlights a subtle aspect of the asymmetric costs literature not covered in the comprehensive review by Banker and Byzalov (2014). Specifically, we test the assertion underlying this literature that reported expenses can serve as an appropriate proxy for estimating the asymmetry of economic costs. Our findings refute this assertion, indicating that reporting choices influence the estimated asymmetry level of reported expenses. As a result, reported expenses are significantly more asymmetric (sticky) than economic costs. This evidence suggests that reporting choices required by GAAP matter in estimating cost stickiness. These findings enrich Banker and Byzalov (2014) by suggesting that future asymmetric costs research should (1) look for alternative accounting variables with the potential to capture economic costs, and (2) explore how various types of reporting choices affect asymmetric cost behavior.

The Magnitude of Sales Change and Asymmetric Cost Behavior

2018 ◽  
Vol 31 (3) ◽  
pp. 65-81 ◽  
Author(s):  
Mustafa Ciftci ◽  
Taisier A. Zoubi
Keyword(s):  
Small Current ◽  
Slack Resources ◽  
Large Current ◽  
Cost Behavior ◽  
Asymmetric Cost ◽  
The Impact ◽  
Cost Stickiness ◽  
Asymmetric Cost Behavior ◽  
Sales Increase ◽  
Jel Classifications

ABSTRACT We investigate the impact of the magnitude of current sales changes on asymmetric cost behavior. We expect that managers are likely to consider small (large) current sales decreases as temporary (permanent). Therefore, they will be less (more) likely to cut costs for small (large) current sales decreases. Accordingly, we predict and find that, conditional on a prior sales increase, cost stickiness is greater for small current sales changes than for large current sales changes. In addition, prior research suggests that, conditional on a prior sales decrease, slack resources retained from the prior period might lead to cost anti-stickiness. We expect that slack resources retained from the prior period will have a greater (smaller) impact on cost behavior for small (large) current sales changes. Accordingly, we predict and find that, conditional on a prior sales decrease, cost anti-stickiness is greater for small current sales changes than for large current sales changes. JEL Classifications: M41; M46; G12.

scholarly journals Asymmetric Cost Behavior and Investment in R&D: Evidence from China’s Manufacturing Listed Companies

2019 ◽  
Vol 11 (6) ◽  
pp. 1785 ◽  
Author(s):  
Renji Sun ◽  
Kung-Cheng Ho ◽  
Yan Gu ◽  
Chang-Chih Chen
Keyword(s):  
Economic Consequences ◽  
Cost Behavior ◽  
Failure Cost ◽  
Asymmetric Cost ◽  
The Mean ◽  
Using Data ◽  
D Investment ◽  
Cost Stickiness ◽  
Asymmetric Cost Behavior ◽  
Total Sales

Asymmetric cost behavior or stickiness has drawn attention in recent years. Although studies have focused on the causes of and factors contributing to cost stickiness, few have investigated its economic consequences. This paper empirically examines how firms’ asymmetric behavior influences their research and development (R&D) investment. Because cost stickiness increases innovation failure cost, we expect cost stickiness to reduce R&D expenditure. By using data from Chinese listed manufacturing firms between 2007 and 2015, we empirically test and confirm this hypothesis. On average, with one standard deviation added to the mean, R&D expenditure over total asset and that over total sales are reduced by 2.7% and 2.2%, respectively. Furthermore, the dampening effect of cost stickiness on R&D investment becomes more prominent with increasing risks faced by firms. Only SG&A cost stickiness exerts a dampening effect on R&D, whereas cost of goods sold (COGS) and total cost stickiness demonstrate no significant effects.

Cost Behavior and Analysts’ Earnings Forecasts

2010 ◽  
Vol 85 (4) ◽  
pp. 1441-1471 ◽  
Author(s):  
Dan Weiss
Keyword(s):  
Management Accounting ◽  
Earnings Forecasts ◽  
Research Topic ◽  
Financial Accounting ◽  
Market Response ◽  
Earnings Surprises ◽  
Cost Behavior ◽  
Asymmetric Cost ◽  
Cost Stickiness ◽  
Asymmetric Cost Behavior

ABSTRACT: This study examines how firms’ asymmetric cost behavior influences analysts’ earnings forecasts, primarily the accuracy of analysts’ consensus earnings forecasts. Results indicate that firms with stickier cost behavior have less accurate analysts’ earnings forecasts than firms with less sticky cost behavior. Furthermore, findings show that cost stickiness influences analysts’ coverage priorities and investors appear to consider sticky cost behavior in forming their beliefs about the value of firms. This study integrates a typical management accounting research topic, cost behavior, with three standard financial accounting topics (namely, accuracy of analysts’ earnings forecasts, analysts’ coverage, and market response to earnings surprises).

scholarly journals PENGARUH MEKANISME ISLAMIC CORPORATE GOVERNANCE TERHADAP KINERJA BANK SYARIAH DI INDONESIA BERDASARKAN MAQASHID SYARIAH INDEKS

2018 ◽  
Vol 6 (1) ◽  
pp. 36
Author(s):  
Anton Anton
Keyword(s):  
Corporate Governance ◽  
Supervisory Board ◽  
Islamic Banks ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Business Goals ◽  
Corporate Governance Mechanisms ◽  
Corporate Governance Mechanism ◽  
Rights And Interests

To be able to realize the business goals and social objectives of Islamic banks need to be supported by Islamic corporate governance mechanisms that protect the rights and interests of all stakeholders who are subject to the rules of sharia. The purpose of this study was to determine the effect of Islamic corporate governance mechanism variables on the performance of Islamic banks in Indonesia based on the maqashid sharia index. The results showed that the number and education of the Sharia Supervisory Board had a significant effect. While concurrent positions and meetings of the Sharia Supervisory Board have no significant effect on the performance of Islamic banks in Indonesia based on the maqashid sharia index.

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