Asymmetric Cost Behaviour and Leverage : The Case of Shipping Industry

The current study explores the asymmetric cost behaviour in US shipping industry. More precisely, it investigates whether various categories of expenses show asymmetric behaviour after increases or decreases in the stream of their revenues and examines the impact of leverage on managers' specific commitment decisions. The data sample consists of 1,151 firm-year observations for the period 2000 to 2018. The empirical evidence suggests that shipping firms' managers adjust resources faster when revenues decrease than when they rise. In addition, we find that financial and operating leverage have negative relation with the intensity of cost anti-stickiness and economic crisis has no significant effect on shipping firms' cost asymmetry. Our findings are robust in relation to various contributing factors associated with the sticky cost phenomenon