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Board characteristics and asymmetric cost behavior: evidence from Egypt

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Board characteristics and asymmetric cost behavior : evidence from Egypt. / Ibrahim, Awad Elsayed.

In: Accounting Research Journal, Vol. 31, No. 2, 30.06.2017, p. 301-322.

Research output: Contribution to journalArticlepeer-review

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Ibrahim, Awad Elsayed. / Board characteristics and asymmetric cost behavior : evidence from Egypt. In: Accounting Research Journal. 2017 ; Vol. 31, No. 2. pp. 301-322.

Bibtex

@article{8f43366753d8430e991b90f1129abbe1,
title = "Board characteristics and asymmetric cost behavior: evidence from Egypt",
abstract = "This study aims to provide further evidence on asymmetric cost behavior (cost stickiness) from one of the emerging economies, Egypt. The study provides also empirical evidence on the potential impact of corporate governance on nature and extent of asymmetric cost behavior. The study estimates three multiple regression models using Ordinary Least Squares (OLS) 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.The analysis provides evidence on COGS asymmetric behavior, where the analysis finds that COGS increase by 1.05 %, but decrease by 0.85% for an equivalent activity change of 1%, 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 do while firms-years with successive sales decrease, higher economic growth and institutional ownership found to exhibit lower cost stickiness. This 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 found to beexamined by very few studies. Finally, the study provides an evaluation of the 2007 Egyptian Corporate Governance Code, from the cost behavior context.",
keywords = "Corporate Governance, cost asymmetry, cost stickiness, Egypt",
author = "Ibrahim, {Awad Elsayed}",
note = "No embargo. ",
year = "2017",
month = jun,
day = "30",
doi = "10.1108/ARJ-11-2015-0148",
language = "English",
volume = "31",
pages = "301--322",
journal = "Accounting Research Journal",
issn = "1030-9616",
publisher = "Emerald Group Publishing Limited",
number = "2",

}

RIS

TY - JOUR

T1 - Board characteristics and asymmetric cost behavior

T2 - evidence from Egypt

AU - Ibrahim, Awad Elsayed

N1 - No embargo.

PY - 2017/6/30

Y1 - 2017/6/30

N2 - This study aims to provide further evidence on asymmetric cost behavior (cost stickiness) from one of the emerging economies, Egypt. The study provides also empirical evidence on the potential impact of corporate governance on nature and extent of asymmetric cost behavior. The study estimates three multiple regression models using Ordinary Least Squares (OLS) 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.The analysis provides evidence on COGS asymmetric behavior, where the analysis finds that COGS increase by 1.05 %, but decrease by 0.85% for an equivalent activity change of 1%, 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 do while firms-years with successive sales decrease, higher economic growth and institutional ownership found to exhibit lower cost stickiness. This 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 found to beexamined by very few studies. Finally, the study provides an evaluation of the 2007 Egyptian Corporate Governance Code, from the cost behavior context.

AB - This study aims to provide further evidence on asymmetric cost behavior (cost stickiness) from one of the emerging economies, Egypt. The study provides also empirical evidence on the potential impact of corporate governance on nature and extent of asymmetric cost behavior. The study estimates three multiple regression models using Ordinary Least Squares (OLS) 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.The analysis provides evidence on COGS asymmetric behavior, where the analysis finds that COGS increase by 1.05 %, but decrease by 0.85% for an equivalent activity change of 1%, 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 do while firms-years with successive sales decrease, higher economic growth and institutional ownership found to exhibit lower cost stickiness. This 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 found to beexamined by very few studies. Finally, the study provides an evaluation of the 2007 Egyptian Corporate Governance Code, from the cost behavior context.

KW - Corporate Governance

KW - cost asymmetry

KW - cost stickiness

KW - Egypt

U2 - 10.1108/ARJ-11-2015-0148

DO - 10.1108/ARJ-11-2015-0148

M3 - Article

VL - 31

SP - 301

EP - 322

JO - Accounting Research Journal

JF - Accounting Research Journal

SN - 1030-9616

IS - 2

ER -

ID: 5973234