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Title: The influence of the trade-off between profitability and future increases in sales on cost stickiness
Author: Argilés Bosch, Josep M.
García Blandón, Josep
Ravenda, Diego
Valencia Silva, Maika
Somoza López, Antonio
Keywords: Rendibilitat
Anàlisi financera
Rate of return
Investment analysis
Issue Date: Jun-2017
Publisher: Universidad de Chile
Abstract: This study analyses cost stickiness under the dilemma between current profitability and future sales increase. When activity decreases firms are faced to keep profitability adjusting resources, while they should also consider long term consequences and keep slack resources which allow building firms capacities to adapt to external challenges and take advantage of future opportunities. We find empirical evidence that changes in current firm profitability and one year ahead sales increase significantly influence resource adjustment in periods when sales decrease. We find a significant moderating effect of changes in profitability, as well as a significant stressing effect of one year ahead sales increase, on cost stickiness.
Note: Reproducció del document publicat a:
It is part of: Estudios de Economia, 2017, vol. 44, num. 1, p. 81-104
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ISSN: 0304-2758
Appears in Collections:Articles publicats en revistes (Empresa)

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