Looking at the relationship between growth and profitability: the role of cost stickiness as a strategic liability
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| Udgivet i: | Journal of Accounting & Organizational Change vol. 21, no. 1 (2025), p. 70-93 |
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Emerald Group Publishing Limited
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| Online adgang: | Citation/Abstract Full Text Full Text - PDF |
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| 024 | 7 | |a 10.1108/JAOC-06-2023-0107 |2 doi | |
| 035 | |a 3150635641 | ||
| 045 | 2 | |b d20250101 |b d20250331 | |
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| 100 | 1 | |a Lefebvre, Vivien |u EM Strasbourg Business School, LaRGE Research Center, Strasbourg, France | |
| 245 | 1 | |a Looking at the relationship between growth and profitability: the role of cost stickiness as a strategic liability | |
| 260 | |b Emerald Group Publishing Limited |c 2025 | ||
| 513 | |a Journal Article | ||
| 520 | 3 | |a PurposeThis paper aims to revisit the relationship between sales growth and profitability by exploring the direct and indirect effects of cost stickiness in the growth process. Cost stickiness refers to asymmetric variations of costs associated with increases and decreases in sales. Cost stickiness is analyzed as a strategic liability that negatively affects profitability because it contributes to organizational rigidity that causes opportunity costs.Design/methodology/approachThe empirical design is based on a large sample of 65,599 French firms drawn from the Amadeus database and it covers the period 2010 to 2019. The authors take advantage of the presentation of expenses made by nature in Amadeus to calculate cost stickiness in a more direct way than what is commonly done in the literature. The authors use various regression models to test the hypotheses.FindingsFor firms that experience rapid growth in sales, cost stickiness has a positive moderating effect on the relation between sales growth and profitability because of a higher asset turnover efficiency. However, for firms that experience slow growth, no growth or a decrease in sales, cost stickiness plays a negative moderating effect on the relation between sales and profitability.Originality/valueThis work contributes to the discussion about the conditions under which high growth is associated with greater profitability and conceptualizes cost stickiness as a strategic liability. The empirical context, privately held firms, has been overlooked by previous research. | |
| 651 | 4 | |a France | |
| 653 | |a Strategic management | ||
| 653 | |a Entrepreneurship | ||
| 653 | |a Opportunity costs | ||
| 653 | |a Costs | ||
| 653 | |a Operating leverage | ||
| 653 | |a Small & medium sized enterprises-SME | ||
| 653 | |a Profits | ||
| 653 | |a Profitability | ||
| 653 | |a Accounting | ||
| 653 | |a Liability | ||
| 653 | |a Investment companies | ||
| 653 | |a Strategic planning | ||
| 773 | 0 | |t Journal of Accounting & Organizational Change |g vol. 21, no. 1 (2025), p. 70-93 | |
| 786 | 0 | |d ProQuest |t ABI/INFORM Global | |
| 856 | 4 | 1 | |3 Citation/Abstract |u https://www.proquest.com/docview/3150635641/abstract/embedded/7BTGNMKEMPT1V9Z2?source=fedsrch |
| 856 | 4 | 0 | |3 Full Text |u https://www.proquest.com/docview/3150635641/fulltext/embedded/7BTGNMKEMPT1V9Z2?source=fedsrch |
| 856 | 4 | 0 | |3 Full Text - PDF |u https://www.proquest.com/docview/3150635641/fulltextPDF/embedded/7BTGNMKEMPT1V9Z2?source=fedsrch |