Name of Student

Geronimo Enguito
Mary Cor Sagrado
Michael Jay B. Homol
Title of the Scientific Paper
Sticky of Selling, General and Administrative Expenses: The Role in Market Value Added and
Economic Value Added
Statement of the Paper’s Research Problem

 What is the significant relationship between economic value added and market value
added and the sticky behavior of administrative, general and sales cost in companies
listed on the Tehran Stock Exchange?
Goals, Purpose, and Significance of the Paper

 To have a knowledge on whether the sticky behavior of general, administrative and

selling cost have a significant relationship on a company’s economic and market value
added.
Framework Used in the Paper
Theoretical: Mentions related literature with regards to the said topic/research problem.
Identification of Assumption(s), if applicable

 There is a significant relationship between general, administrative and selling cost and
economic value added
 There is a significant relationship between general, administrative and selling cost and
value added of market.
Data Collection Methods and Analysis Used in the Paper
The said research is descriptive-survey applied research where 120 companies were selected of
Tehran Stock Exchange as respondents.
Summary of the Results
The statistical methods done in the research have yield results that supports the
hypotheses of the study. In this regard, a statistically significant positive relationship between
economic value-added and the sticky of administrative, general and sales cost was determined
based on the economic value added factor and error level of 0.00002 and 0.001, respectively.
Hence, as the company’s economic value-added increases or decreases the same shall happen to
its general and administrative expenses and sales cost. Furthermore, at sg=0 and with
independent variables explaining 70% of dependent variable; it was identified that market value
added and the sticky of administrative, general and selling cost have significant positive
relationship thus as the MVA increases or decreases it also will have the same effect to the sticky
characteristic of the mentioned costs follows.
Three (3) Major Points of Agreement

 Asymmetric reaction of cost to sales changes has a negative impact on income

smoothing.
 Asymmetric cost behavior might arise because managers make economically rational
trade-off decisions and compare the adjustment costs with the holding costs of committed
resources. 
 The EVA-based approach help managers for better investment in the management of
intellectual capital.
Three (3) Major Points of Disagreement

 Managers’ optimism in forecasting future sales does not have a significant relationship
between the sticky of cost of sales.
 Costs of general and administrative are adhesive, and sticky of these costs removes in the
next period.
 EVA-based approach is complex to apply.
Conclusions

It has been concluded that there is a significant relationship between economic and
market value added and sticky behavior of administrative, general and selling cost in companies
listed in Tehran Stock Exchange hence, as a company’s value added increases sticky behavior of
administrative, general and sales cost will also increase. Furthermore, it was recommended that
companies should assign specific personnel to evaluate and manage the added value so that
benefits from intangible assets will be used to earn higher financial performance and be able
focus their attention to allocate employees in relation to the level of sales and earnings in order to
avoid long-term contracts with staffing so that the company can prosper in times of economic
downturn. Managers and corporate decision makers must have an overview of cost and
revenues, apply changes in cost when they are ascertained that the sticky trend of costs is
permanent and should not choose short-term cost and revenue goals over long-term ones. In
addition, due to the direct relationship of the level of asset and the costs sticky levels it is
necessary for managers to consider bonding cost.