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348632

The Predictive Power of Cost Stickiness on the Long- Term Firm Value: A Management Expectation Theory

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Last updated: 24 Dec 2024

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Abstract

Sticky-cost behavior is considered a complex phenomenon and a great challenge for practice. Since then, the management of the firm must prudently expect future demand to make rational decisions regarding whether to keep or drop the committed resources, which in turn increases or decreases the degree of cost stickiness. Therefore, the main purpose of this research is to investigate the impact of sticky cost behavior on predicting the future value of the firm. The data of the current study were obtained from the most actively traded non-financial 84 firms listed on EGX-100 from 2013–2018. The sample selection is based on quarterly data on revenue and costs to measure the cost stickiness (3311 observations). A Panel data analysis was used to test the research proposal model. The results of this research implied that sticky cost behavior with its different components has a positive impact on the firm's value in the long run, and this result perfectly coincides with the management expectations lens, which implies that the optimistic expectations of management regarding future demand encourage managers to keep slack resources and bear the extra sticky costs associated with this decision. Then, based on these optimistic expectations, in the long run, both behavior and performance will be positively influenced, which enhances the overall long-term value of the firm.

DOI

10.21608/acj.2024.348632

Keywords

Cost Stickiness, long-term firm value, management expectations, Sticky cost behavior

Authors

First Name

Sameh Abdel-Moneem

Last Name

Serag

MiddleName

-

Affiliation

Tanta University, Egypt

Email

sameh.serag@commerce.tanta.edu.eg

City

-

Orcid

-

First Name

Maysa Ali M.

Last Name

Abdallah

MiddleName

-

Affiliation

اTanta University, Egypt

Email

maysa_ali@commerce.tanta.edu.eg

City

-

Orcid

-

First Name

Nayera Abdeldayem

Last Name

Eltamboly

MiddleName

-

Affiliation

Tanta University, Egypt

Email

nayra_dayem@commerce.tanta.edu.eg

City

-

Orcid

-

Volume

61

Article Issue

2

Related Issue

46998

Issue Date

2024-03-01

Receive Date

2024-03-10

Publish Date

2024-03-30

Page Start

291

Page End

317

Print ISSN

2682-4183

Online ISSN

2682-4191

Article File

ACJ_Volume 61_Issue 2_Pages 291-317.pdf

PDF . 6.1MB

Link

https://acjalexu.journals.ekb.eg/article_348632.html

Detail API

https://acjalexu.journals.ekb.eg/service?article_code=348632

Order

9

Type

المقالة الأصلية

Type Code

759

Publication Type

Journal

Publication Title

مجلة جامعة الإسکندرية للعلوم الإدارية

Publication Link

https://acjalexu.journals.ekb.eg/

MainTitle

The Predictive Power of Cost Stickiness on the Long- Term Firm Value: A Management Expectation Theory

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Article

Created At

24 Dec 2024