산업수준 요소들이 판매비와관리비에 미치는 영향 = The Effect of industry-Level factors on SG&A costs

다국어 초록 (Multilingual Abstract)

This study analyses industry-level factors affecting size of the SG&A costs in the Korean manufacturing industry using a 12 year panel data set. The extant studies investigated the relationship between mainly firm-level factors(typically, sales) and SG&A costs. The monitoring and control of SG&A costs in the field have also largely been exerted in an ad hoc way. A typical indicator with which to judge the efficiency of the expenditure of SG&A costs is the ratio of SG&A costs to sales, yearly changes in the ratio generally being the concern of investors and analysts. This is in contrast to lots of attention payed to the efficiency of CGS (Cost of Goods Sold). For example, various management tools have appeared and drawn much attention in the area of CGS from practitioners as well as academia. Among them are Just-in-Time, Cell Manufacturing, Total Quality Control, and Activity-based Management, to give a few. The size of SG&A costs are largely affected by the structural characteristics of the industry within which a firm plays. We thus will inevitably reach the limit to the understanding of the behavior of SG&A costs if we try to explore the drivers of SG&A costs from the firm-level perspective only. The existing approaches have long rendered SG&A costs largely discretionary and thus difficult to test for rationality and efficiency. With an increasing voice for the efficiency of the expenditure of SG&A costs, however, it will be inevitable to test their efficiency along value chain activities. So far studies on cost drivers mainly have focused on internal business activities. Activity-based costing(ABC) suggests utilizing four conceptual cost hierarchies, the classification made according to the relationship between output volume and costs. Cost drivers advanced by ABC school also are firm-level elements including production volume, machine hour, number of batch, number of products, product complexity, etc. This concept applies not only to manufacturing activities but also to other value chain activities. In this regard, it may be said that cost drivers in ABC are better understood from an endogenous perspective, which is also true for traditional costing systems. More comprehensive, possibly advanced, school of thought concerning cost drivers comes from Shank and Govindarajan(1992), who generically categorize cost drivers into two groups: structural cost drivers and executional cost drivers. Nevertheless, this standpoint still falls into the endogenous cost driver perspectives. These perspectives certainly help explain the underlying drivers of costs of manufacturing activities, but may not help explain the drivers of those of non-manufacturing activities, which are mainly influenced by the factors outside a firm. SG&A costs, the large part of which consist of costs of non-manufacturing activities, have been considered difficult to manage, or discretionary. One possible explanation for that is the endogenous viewpoint of cost drivers. This study provides an enhanced understanding of the behavior of SG&A costs and helps us control them by exploring the effects of industry-level factors including the size of the industry, entry cost, the degree of competition on SG&A costs. The results using various econometrics models, including pooled OLS, Fixed effect models, Random Effect model and Random Coefficient model, to deal with our balanced panel data set, are analysed and compared. In doing so, a hierarchical linear model is utilized to analyse the effects of variables from multiple classes. The analyses show that SG&A costs are positively related to various firm-level factors including sales, and negatively related to the size of industry and the degree of competition. Unfortunately, however, we could not reach a reliable conclusion concerning the relationship between the entry cost and SG&A costs. In order to eliminate the possible effect of time which persist throughout the sample period, we also run a detrended regression and find similar results. Separating SG&A into S(selling) costs and GA(general and administrative) costs, we find that S costs are generally affected by firm-level factors only, while GA costs are affected by firm-level as well as industry-level factors. The results of the study raise a need to reconsider the perspective concerning cost drivers which has so far been confined within the firm-level only. This study contributes to the study of SG&A costs in particular and cost drivers in general, by enhancing the understanding of the behaviour of SG&A costs and providing a new viewpoint concerning cost drivers. It is also hoped that this line of management accounting research will contribute to supporting strategic decision making, beyond managerial decision making.

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