Evaluating the Effect of Political Uncertainty on the Cost Stickiness

Iranian Journal of Accounting, Auditing and Finance

مقاله 1، دوره 2، شماره 4، اسفند 2018، صفحه 1-10   

نوع مقاله: Original Article

شناسه دیجیتال (DOI): 10.22067/ijaaf.v4i1.81056

نویسندگان

Mohammad Reza Ola^{* 1}؛ Mehran Matinfard²؛ Maryam Minab²

¹Islamic Azad University, Mashhad

²Islamic Azad University, North Tehran Branch

چکیده

The present study's main objective is to assess the impact of political uncertainty on cost stickiness intensity. This paper attempts to compare the cost stickiness intensity in periods with high political uncertainty with other periods. The statistical population includes listed companies on the Tehran Stock Exchange during 2009-2016 that given the use of screening methods, and after omitting the remote observations, this amount reaches 131 firms. In this paper, political uncertainty and sales changes were considered independent variables to assess their impact on asymmetrical cost behavior. In this paper, the panel data approach is used to test the research hypothesis. The data analysis results of firms using the multivariate regression at the 95% confidence level demonstrate that political uncertainty has a significant effect on cost stickiness intensity. The presidential election years of 2009 and 2013 were considered as years with high political uncertainty to achieve the objectives. The study results indicate the presence of sticky behavior of sales, general, and administrative costs in the so-called years. The asymmetry in cost behaviors is stronger during election years than in the non-election years, even after controlling other firm-level and country-level determinants.
 

کلیدواژه‌ها

Cost stickiness؛ political uncertainty؛ presidential election

مراجع

Anderson, M.C. Banker, R.D. and Janakiraman, S.N. (2003). Are selling, general, and
administrative costs “sticky”?. Journal of accounting research, 41 (1), 47-63.
https://doi.org/10.1111/1475-679X.00095
Agmont, T. (1985). political economy and risk in world financial markets. Lexington
Books, Massachusetts: DC Health and company. ISBN-13: 978-0669083392
Banker, R.D. Byzalov, D. and Chen, L.T. (2013). Employment protection legislation,
adjustment costs and cross-country differences in cost behavior. Journal of
Accounting and Economics, 55 (1), 111-127.
https://doi.org/10.1016/j.jacceco.2012.08.003
Bloom, N. Bond, S. and Van Reenen, J. (2007). Uncertainty and investment
dynamics. The review of economic studies, 74 (2), 391-415. Doi: 10.3386/w12383
Bernanke, B.S. (1983). Irreversibility, uncertainty, and cyclical investment. The
Quarterly Journal of Economics, 98 (1), 85-106. https://doi.org/10.2307/1885568
Dai, L. and Ngo, P.T. (2020). Political uncertainty and accounting
conservatism. European Accounting Review,
https://doi.org/10.1080/09638180.2020.1760117
Durnev, A. (2010). The real effects of political uncertainty: Elections and investment
sensitivity to stock prices. The Quarterly Journal of Economics, 98 (1), 85-106.
https://www.jstor.org/stable/1885568
Jens, C. (2017). Investment around U.S. gubernatorial elections. Journal of Financial
Economics, 124 (3), 563-579. https://doi.org/10.1016/j.jfineco.2016.01.034
Julio, B. and Yook, Y. (2016). Policy uncertainty, irreversibility, and cross-border
flows of capital. Journal of International Economics, 103, 13-26.
https://doi.org/10.1016/j.jinteco.2016.08.004
Izadpour, M. Niko Maram, H. Rahnama Roodpashti, F. and Bani Mahd, B. (2018). An
Analysis of the Impact of Uncertainty on Cost Stickiness in the Tehran Stock
Exchange. Financial Economics, 12 (43), 49-74.
Lee, W.J., Pittman, J. and Saffar, W. (2020). Political uncertainty and cost stickiness:
Evidence from national elections around the world. Contemporary Accounting
Research, 37(2), 1107-1139. https://doi.org/10.1111/1911-3846.12547
Namazi, M., Ghaffari, M., and Fereyduni, M. (2012). Fundamental Analysis of Costs
and Cost Sticky Behavior Emphasizing Scope Changes in Tehran Stock Exchange.
Journal of Accounting Advances, 4 (2), 151-17.
https://www.magiran.com/paper/1111143/?lang=en
Iranian
Journal of
Accounting,
Auditing &
Finance
10
Rezaei, M., Parsa, H. and Mehrabaniyan, S. (2018). The Effect of Economic Growth
and Sanctions on Cost Stickiness in Listed Firms on the Tehran Stock
Exchange. Journal of Accounting and Auditing Review, 24 (4), 551-572.
https://www.sid.ir/en/journal/ViewPaper.aspx?id=656715
Zorgui, I. (2011). Institutional Quality and Political Risk. British Journal of Economics,
Finance and Management Sciences, 3 (1), 124-136.