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263
臺大管理論叢
第
28
卷第
2
期
Table 3 through Table 5 shows the empirical results of the overall effect of customer
concentration on cost stickiness. Estimates of three different variables of costs, which are
SGA, COGS
, and
OC
, are shown in Table 3 through Table 5 with three specifications,
respectively. SG&A costs are most commonly used in the literature on cost stickiness
since the seminal paper, Anderson et al. (2003). We report the results in Table 3.
First, Column (1) of Table 3 reports the baseline model derived from Anderson et al.
(2003) with the modification that my variable of interest
CC
is incorporated. Specifically,
the coefficient on ∆
ln(Sale)
is 0.57971 (
t
-statistic = 112.28), positively significant at the
0.1% level, which is consistent with prior literature that change in SG&A costs are
positively associated with change in sales revenue. The estimated coefficient, 0.57971
indicates that SG&A costs increase 0.57 % per 1% increase in sales revenue. The
coefficient on ∆ln
(Sale)*Dec
is -0.16276 (
t
-statistic = -15.20), significantly negative at the
0.1% level, which is consistent with the results in Anderson et al. (2003) that provides
strong support for cost stickiness. The combined value of these two coefficients on
∆ln
(Sale)
and ∆ln
(Sale)*Dec
is 0.41695, indicating that SG&A costs decreases only
0.417% per 1% decrease in sales revenue. The fact that both the coefficient on ∆ln
(Sale)
and the combined value of the two coefficients are both significantly less than one,
indicating that SG&A costs are not closely proportional to changes in sales revenue.
Selling, general and administrative expenses (
SG&A
) is the primary non-production cost
presented in the income statement. When customer concentration (
CC
) is incorporated in
the model, the coefficient on our variable of interest,
CC*∆ln(Sale)*Dec
, is 0.17843
(
t
-statistic = 5.07), significantly positive at the 0.1% level. The result indicates that for
companies with more concentrated customers, SG&A costs are less sticky when sales
decrease.