Competition and slack: The role of tariffs on cost stickiness
Abstract
Slack exists when entities hold resources in excess of those required to support current operations. “Sticky” spending is a specific type of slack spending that occurs when a firm reduces spending by less when sales fall than it increases spending when sales rise by an equivalent amount. Changes in a firm's environment affect its propensity to engage in sticky spending. We examine how competition influences sticky spending, positing two...
Paper Details
Title
Competition and slack: The role of tariffs on cost stickiness
Published Date
Oct 26, 2021
Volume
68
Issue
8
Pages
855 - 880
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