How Sticky Are the Costs? Evidence from the Shipping Industry

Dimitris Gavalas, Theodore Syriopoulos


Trying to understand how cost behaves seems to be an essential element of cost and management accounting. In this study, we examine whether costs increase more when operation rises than they decrease when operation falls by an equivalent amount. The shipping industry is taken as an empirical case to study these issues at hand, based on a selected sample of 123 publicly-listed shipping companies, over 2006-2016. The sample includes companies belonging to the three main shipping sectors, i.e. tankers, containers and dry-bulk. We applied pooled regressions, based on ordinary least squares. Each model is run for each sample and each type of cost that we have considered in our model. We have gone through several tests of cost stickiness for some types of costs and their determinants. What we have found is the presence of stickiness both for the total cost of labor and the vessel operating costs.

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