Does geopolitical risk alleviate the sticky cost behavior of firms? Evidence from India

Title

Does geopolitical risk alleviate the sticky cost behavior of firms? Evidence from India

Creator

Srivastava S.; Guruprasath T.; Das S.

Description

This study explores how geopolitical risk (GPR) affects the sticky cost behavior of firms. Using a piecewise linear regression analysis on 11,180 firm-year observations from India for the period 20112020, we discover that GPR reduces asymmetry in the cost behavior of firms. These results imply that GPR incentivizes firms to adopt a more cautious approach to cost management practices in order to mitigate bankruptcy risks. Nevertheless, we find that financial constraints limit the ability of GPR to moderate the stickiness in the cost behavior of firms. The Author(s) under exclusive licence to The Society for Reliability Engineering, Quality and Operations Management (SREQOM), India and The Division of Operation and Maintenance, Lulea University of Technology, Sweden 2024.

Source

International Journal of System Assurance Engineering and Management

Date

2024-01-01

Publisher

Springer

Subject

Geopolitical risk; India; Sticky costs

Coverage

Srivastava S., School of Commerce, Finance and Accountancy, CHRIST (Deemed to be University), Bangalore, India; Guruprasath T., School of Commerce, Finance and Accountancy, CHRIST (Deemed to be University), Bangalore, India; Das S., School of Commerce, Finance and Accountancy, CHRIST (Deemed to be University), Bangalore, India

Rights

Restricted Access

Relation

ISSN: 9756809

Format

Online

Language

English

Type

Article

Identifier

https://doi.org/10.1007/s13198-024-02492-8

https://www.scopus.com/inward/record.uri?eid=2-s2.0-85202929035&doi=10.1007%2fs13198-024-02492-8&partnerID=40&md5=939788bd65cf1504599f4ed9f825fd4a