- مبلغ: ۸۶,۰۰۰ تومان
- مبلغ: ۹۱,۰۰۰ تومان
Purpose: The present study explores the asymmetric cost behaviour in Greek local governments. More precisely, it investigates whether municipality costs show stickiness or anti-stickiness behaviour after increases or decreases in the stream of their revenues. Design/methodology/approach: The Anderson et al.’s (2003) approach is adapted to the public sector environment by using types of expenses and revenues typical to the local government setting. The data sample consists of 1,852 observations of Greek municipalities for the period 2002-2008. Findings: The empirical evidence suggests that local government managers adjust resources related to administrative services faster when revenues decrease than when they rise (anti-stickiness cost behaviour). On the contrary, they adjust costs of service provision which are associated with core activities asymmetrically; more quickly for upward than for downward activity changes (cost-stickiness behaviour). Research implications: While prior studies examine the sticky cost phenomenon in the private sector, this study explores this phenomenon in the public sector through a data sample of municipalities. Local governments constitute an appealing and unique setting for the examination of asymmetric cost behaviour due to the existence of a strong political influence, which appears to affect rational economic decision-making, and their non-profit character, which prevents them from acting in a business-like manner. Practical implications: Understanding how cost stickiness works inside local governments, could lead to an understanding of its implications in periods of cutback measures. Decreases in municipalities’ subsidies and grants as a result of cutbacks in central government expenditures should not be expected to automatically result in symmetric savings in expenditures as corresponding increases in expenditures when revenues used to grow. At the same time, it might be difficult to achieve balanced budgets in municipalities when there is a considerable decrease in revenues, without having to make considerable adjustments to the input values, the output and the mix of services offered by them. Originatity/value: This study contributes to the accounting literature by expanding the understanding of how deliberate decisions influence the asymmetric cost behaviour in local governments, to different cost categories (administrative expenses and cost of service provision) and different revenue categories (grants, tax revenues and revenues from sales of goods and services).
The current study investigates the cost behaviour in a data sample of Greek local governments. Local governments constitute an appealing and unique setting for the examination of asymmetric cost behaviour due to the existence of strong political incentives, which appear to affect rational economic decision-making, and their nonprofit character, which leads public sector executives and politicians to act under different motives. Moreover, while the existing research on sticky cost phenomenon has primarily focused on the behaviour of selling and administrative expenses with respect to the sales volume, the study documents the anti-sticky behaviour of expenditures relating to administrative and public relation activities and the stickiness behaviour of the cost of service provision to the citizens. Furthermore, the study dismantles and analyses separately local government revenues coming from different sources; that is regular grants from the state budget, tax revenues and revenues from sales of goods/services.
The empirical evidence of this study provides support to the inference that the cost response to administrative and public relation expenses on a revenue level decrease is greater than in the case of a revenue increase (cost anti-stickiness). Findings show that local government managers adjust administrative and public relation expenses faster when revenues decrease than when they rise because it is much easier and less politically costly to adjust capacity levels in the supplementary activities. Thus, it turns out that local governments’ managers will be reluctant to maintain supplementary idle resources after revenues decline.