Jugović, Jovana eng Abstract: This paper is focused on the theory of sticky costs, created out of researches which pointed to the fact that costs do not act symmetrically in the case of equivalent increase and decrease of the activity volume, as it is implied by the traditional cost theory. Deliberate business decisions, the ones made in order to increase company’s value, as well as opportunistic decisions aimed at the realization of managers' personal goals are found as some of essential causes of cost stickiness. In order to examine the phenomenon of stickiness in the cost behavior of companies that operate in Serbia, we conducted a research on a sample of 917 medium and large companies from manufacturing sector for the period 2007 – 2016. The analysis of panel data pointed to the presence of stickiness in the behavior of operating costs - it showed that they grow by 0.847% as revenues grow by 1%, and they fall by 0.718 % due to 1% drop in revenues. We also found a lagged adjustment to operating costs for changes in operating revenues and partial reversal of stickiness in the period after a revenue decrease. info:eu-repo/semantics/article https://phaidrabg.bg.ac.rs/o:28626 doi:10.22190/FUEO201102006J ISSN: 0354-4699 http://creativecommons.org/licenses/by-nc-nd/4.0/legalcode application/pdf 548087 bytes Are costs sticky? : evidence from Serbia 2021 Facta universitatis. Series: Economics and organization 18(1) Key words: cost behavior, cost stickiness, adjustments costs, behavioral finance, agency theory