The Impacts of Cost Stickiness on the Profitability of Indonesian Firms

The objectives of this study is to investigate the
existence of the sticky cost behavior of firms listed in the Indonesia
Stock Exchange (IDX) and to find evidence on the effects of sticky
operating expenses (SG&A expenses) on profitability of firms. For
the first objective, this study finds that the sticky cost behavior does
exist. For the second objective, this study finds that the stickier the
operating expenses the lesser future profitability of the firms. This
study concludes that sticky cost affects negatively to the performance
and, therefore, firms should include flexibility in designing the cost
structure of their firms.

• Dezie L. Warganegara
• Dewi Tamara

• Operating Expenses
• Profitability
• SG&A
• Sticky Costs
• Indonesia Stock Exchange (IDX).

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