ScholarWorks@숙명여자대학교

초록

This study examines how demand uncertainty affects managers' cost structure decision. The general opinion of the relation between uncertainty and the mix of fixed and variable costs is that firms with greater uncertainty will maintain relatively lower fixed and higher variable costs. However, a recent study refutes the conventional perspective, by empirically and theoretically demonstrating that managers under higher uncertainty will increase the input in fixed costs to reduce congestion costs, resulting in a more rigid (less elastic) cost structure in the short term (Banker, Byzalov, and Plehn-Dujowich 2014b). Using data on Korean firms from 2000 to 2015, this study provides evidence that cost elasticity is decreasing in demand uncertainty. This finding implies that managers under higher uncertainty will increasing the committed capacity to reduce congestion costs, resulting in a more less elastic cost structure with higher fixed and lower variable costs in the short term. This study finds no difference between KOSPI and KOSDAQ market using SG&A costs as a dependent variable. However, the negative relation between demand uncertainty and cost elasticity is more pronounced in KOSDAQ firms, when the number of employee as a dependent variable. it suggests that KOSDAQ firms have more difficulty in hiring employees.

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