The Association Between Activity-Based Costing And Performance: Empirical Evidence From Moroccan Companies

Charaf, Karim; Rahmouni, Ahmed Fath-Allah; Sabar, Mohamed Article The Association Between Activity-Based Costing And Performance: Empirical Evidence From Moroccan Companies Journal of Accounting and Management Information Systems (JAMIS) Provided in Cooperation with: The Bucharest University of Economic Studies Suggested Citation: Charaf, Karim; Rahmouni, Ahmed Fath-Allah; Sabar, Mohamed (2022) : The Association Between Activity-Based Costing And Performance: Empirical Evidence From Moroccan Companies, Journal of Accounting and Management Information Systems (JAMIS), ISSN 2559-6004, Bucharest University of Economic Studies, Bucharest, Vol. 21, Iss. 1, pp. 25-50, https://doi.org/10.24818/jamis.2022.01002 This Version is available at: https://hdl.handle.net/10419/310821 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by/4.0/ Accounting and Management Information Systems Vol. 21, No. 1, pp. 25-50, 2022 DOI: http://dx.doi.org/10.24818/jamis.2022.01002 The association between Activity-Based Costing and performance: Empirical evidence from Moroccan companies Karim Charaf1,a, Ahmed Fath-Allah Rahmounib, Mohamed Sabara a Groupe ISCAE, Morocco, bLAREFAG, ENCGT, Abdelmalek Essaadi University, Tangier, Morocco Abstract Research Question: Can the adoption of ABC have a positive impact on the performance of the company? Motivation: We have observed in the literature that studies on the impact of ABC on performance most often focus on financial performance. We want to explore this theme by studying, in addition to financial performance, non-financial performance. Idea: This study attempts to study the impact of ABC on performance. Data: Data was gathered using a multi-item questionnaire survey on large companies. To obtain rich data, three semi-structured interviews were conducted with management controllers. In total, 62 companies responded to the questionnaire. Tools: We used two types of tests to analyze the data: the Wilcoxon and Mann-Whitney tests and the median test. Findings: The results indicate that, overall, companies that have adopted ABC have improved their performance significantly. Indeed, its adoption has a positive effect that is more important than the traditional method on the non-financial performance of companies. However, a direct relationship between ABC and financial performance has not been confirmed. Contribution: Previous studies have focused on the effect of ABC on financial performance with inconclusive results. Our contribution has been to demonstrate the positive impact of ABC on non-financial performance. We have also concluded an indirect relationship between ABC and financial performance, which happens precisely through improving non-financial performance. We also concluded the importance of the time variable in evaluating the link 1 Corresponding author: Karim Charaf, Groupe ISCAE, Km 9,500 Route de Nouasseur B.P. 8114 - Casablanca Oasis, Casablanca, Morocco, email address: [email protected]. Accounting and Management Information Systems 26 Vol. 21, No. 1 between ABC and performance. The expected benefits from ABC depend on time and cannot be delivered immediately and simultaneously. Keywords: Activity-Based Costing, performance, management accounting, performance dimensions. JEL codes: M41 1. Introduction Activity-based Costing was devised more than twenty-five years ago; its adoption has mainly been motivated by the search for greater efficiency in the face of competitive pressures (Malmi, 1999, Bjørnenak, 1997). Also, ABC information can be widely used to make strategic decisions, improve companies' profit performance (Bjørnenak & Mitchell, 2002), and assess continuous performance improvement (Cagwin & Bouwman, 2002). However, although ABC has experienced a broad and rapid diffusion worldwide, there is still divergence regarding its role in improving company performance. The purpose of this article is to evaluate the consequences of adopting ABC on companies' performance. The number of books and articles dealing with ABC is considerable. These studies are related to the fundamentals of ABC and the processes for implementing it, especially within specific companies. However, there has been less research on the impact of ABC on the performance of companies. Among these studies, we cite Cagwin and Bouwman (2002), Ittner et al. (2002), Kennedy et al. (2001), Banker et al. (2008), Bescos and Charaf (2013), Maiga (2014), Henri et al. (2016), Uyar and Kuzey (2016), Kissa et al. (2019) and Vetchagool et al. (2020). We retain the definition of performance used by Bourguignon (2004) because it seems the most complete. According to Bourgignon, performance can be defined as "the achievement of organizational objectives, whatever the nature and variety of these objectives. This realization can be understood in the strict sense (result) or in the broad sense of the process that leads to the result (action)". The expected goal of any managerial innovation is generally to improve progressively, directly or indirectly, companies' financial and operational performance and ultimately help them achieve their objectives. Before adopting any organizational innovations such as ABC, companies need to know if it positively impacts their performance. Because a management tool that does not improve financial and non-financial performance will have a low chance of being adopted, in this sense, it is essential to show the impact of the ABC method on the performance of companies. The association between Activity-Based Costing and performance: Empirical evidence from Moroccan companies Vol. 21, No. 1 27 The use of ABC by companies allows them to reduce the costs, improve the quality of information, reduce the manufacturing cycle time, eliminate the activities that do not create value to the customers, and ultimately improve the Economic Value Added. In the literature on ABC, some authors have demonstrated that the adoption of ABC can have a positive impact on financial and non-financial performance (Bescos & Charaf, 2013; Maiga, 2014; Cooper & Kaplan, 1991; Ittner et al., 2002; Anderson & Young, 1999; Kissa et al. 2019; Zeghal & Bouchekoua 2000). However, other researchers have not found a positive impact of ABC on performance (Cagwin & Bouwman, 2002; Ittner et al., 2002; Bergeron & Bélaïd, 2006). In this sense, in the literature on ABC, we do not find a consensus between the various studies. This topic deserves further research in different contexts. Studies on the impact of ABC on performance in Morocco are not numerous. To our knowledge, two studies have been published on this topic in Morocco (ELhamma & Yi Fei, 2013; Bescos & Charaf, 2013). Given the development experienced by Moroccan companies in terms of management tools, it is essential to conduct more research to improve knowledge on management control practices in Morocco. Researchers should pay more attention to the study of management control tools in the Moroccan context. In this sense, this research aims to study through a survey the adoption of ABC and its impact on the performance of Moroccan companies. This article presents theoretical and practical contributions. First of all, it makes it possible to enrich the academic debate on ABC and performance in general and test this problem in a context that has not been cleared enough up until now. Much of the preceding work has found a positive relationship between ABC adoption and financial performance. In this article, we have shown a positive and indirect link between the adoption of ABC and non-financial performance. The practical contributions consist of the fact that this research work can aid companies that wish to adopt the ABC method. It gives them guidance on the main elements impacted by the adoption of this tool. This paper is structured as follows. First, we will present a literature review on the relationship between ABC and performance. Then, we will discuss the methodology used to validate our hypothesis, and finally, the results, the discussions, and the conclusion will be presented. 2. Literature review and research model The ultimate purpose of adopting Activity-Based Costing is to get benefits that directly or indirectly affect performance (Bescos & Charaf, 2013). Organizations that adopt ABC can obtain efficiency gains by identifying, reducing, or eliminating (or removing) activities that do not add value to their customers and redesigning products and processes (Bescos & Charaf, 2013; Maiga, 2014; Cooper & Kaplan, Accounting and Management Information Systems 28 Vol. 21, No. 1 1991). Therefore, ABC can reduce product costs, improve information quality, and reduce the manufacturing cycle time (Ittner et al., 2002; Anderson & Young, 1999; Kissa et al., 2019). According to several studies, the implementation of ABC impacts financial performance. According to Zeghal and Bouchekoua (2000), companies that adopted ABC in the USA have successfully improved their Economic Value Added. Kennedy et al. (2002) studied the impact of ABC on the share value of American companies during three years. They conclude that the value of the shares in companies that have adopted ABC increased more than those companies that did not implement ABC. Indeed, in companies that adopted ABC, the improvement caused by the ABC is not immediate. According to the same study, the authors conclude that because of the complexity of the new costing system and the time needed for its full implementation, the benefits of ABC appear only after two years of use. Bescos and Charaf (2013) studied one Moroccan bank and confirmed that the adoption of ABC had a positive impact on the bank's financial performance. Notably, the bank reduced its production costs and improved its productivity and profitability. Also, in Morocco, Elhamma and Yi Fei (2013) studied the impact of ABC adoption on firm performance. They confirm the results mentioned above, namely that the adoption of ABC by Moroccan companies positively impacts firms' profitability. In Jordan, Hardan and Shatnawi (2013) found that adopting ABC improved the financial performance of telecom companies. Companies that have adopted ABC have optimized their expenses, increased their profitability, and improved the cost calculation of provided services. In the USA, Maiga (2014) confirmed that the adoption of ABC had a positive impact on profitability. Henri et al. (2016) found that the tracking of environmental costs positively and significantly influences financial performance through ecological initiatives. Finally, in Thai companies, Vetchagool et al. (2020) demonstrated that using ABC for cost calculation and analysis and cost strategy directly affected operational performance and can therefore indirectly improve financial performance. This association is positive and significant when ABC is established in companies with specific characteristics related to the cost structure, the complexity of the firms' operations, and the diversity of services offered. Nevertheless, Cagwin and Bouwman (2002), in their study of internal auditors who were members of the Institute of Internal Auditors in the United States, did not find a significant impact of ABC adoption on the financial performance of firms. Similarly, Ittner et al. (2002) and Bergeron and Bélaïd (2006) found no significant association between ABC and financial performance in their studies of industrial companies. However, Ittner et al. (2002) found that ABC had an indirect and significant impact on production costs by improving quality and production cycle time. Likewise, Bergeron and Bélaïd (2006) show that companies that have implemented ABC use The association between Activity-Based Costing and performance: Empirical evidence from Moroccan companies Vol. 21, No. 1 29 and exploit the information provided by their costing system more than those firms using a traditional costing system. They also found a positive relationship between the use of cost information and non-financial performance measured in particular by quality, time, and cost variations. In the same way, Banker et al. (2008) find an indirect impact of ABC on industrial performance. They indicate that new production management practices play a mediating role in the relationship between ABC and non-financial performance (the industrial performance is delimited here to cycle time, quality, and reduction of unit costs). The results provide a new conceptual direction showing significant links between the variables that explain performance, such as ABC and other production management practices. This research also suggests that the adoption of ABC alone does not improve non-financial performance. Bescos and Charaf (2013) find that adopting ABC by the Moroccan bank positively impacts organizational performance. According to the findings, the use of ABC results in improving communication, improving quality, the capability to calculate the number and cost of activities of movement-control values, business registration, and the monitoring of technical incidents reported by bank managers. Elhamma and Yi Fei (2013) found that adopting ABC positively impacts business performance in general. Dubihlula and Rundora (2014), in their study of South African small and medium-sized enterprises (SMEs), find that the implementation of ABC has a positive impact on the business performance of South African SMEs. However, Dubihlula and Rundora (2014) and Elhamma and Yi Fei (2013) did not detail business performance criteria in their studies. Maiga (2014) confirms that the adoption of ABC can result in cycle-time improvement, quality improvement, and cost improvement. However, Uyar and Kuzey (2016) conclude that the cost system design alone does not impact firm performance. It affects performance via management accounting practices. The performance improvement can be obtained because the firm utilizes the cost data obtained through various decision-making tools; otherwise, there is no point in bearing the cost of building such a system. The main results of the studies on the relationship of ABC and firms' performance are summarized in the appendix. From the literature review, we propose the following hypothesis: Companies that adopt ABC are performed better than those that do not adopt it (cf. Figure 1). Figure 1. Impact of ABC on company performance ABC adoption Yes/No Performance Explained variable Grouping criteria Accounting and Management Information Systems 30 Vol. 21, No. 1 The supporters of ABC consider it to be an indicator of performance. Its use is justified by the need to improve performance. Indeed, ABC is viewed as a tool that allows firms to understand cost components. Cooper and Kaplan (1992) state that ABC's objective is not to calculate costs accurately but to improve profitability. The elimination of low value-added activities, the measurement of performance, the development and monitoring of budgets, the analysis of the profitability of products/services and customers, the tracking of cost reduction actions, price-fixing, making outsourcing decisions, and carrying out quotes for customers are considered the primary uses of ABC by French companies (Bescos et al., 2002). 3. Research methods 3.1 Sample This study aims to test the link between the adoption of ABC and business performance. Our literature review led us to the following hypothesis: the adoption of ABC has a positive association with the company's performance. Data for this research was drawn from a survey using a questionnaire. The initial sample consists of the Kompass ranking of the 350 largest companies in Morocco. From this sample, 49 companies were removed as nine did not have complete addresses, and 40 were not appropriate for the analysis as they are consulting companies. Finally, our survey is composed of 301 companies. The questionnaire was written in French using questions from the literature. To improve the questionnaire's quality, we tested it using a sample composed of 38 management controllers and five academics in management accounting. After that, we sent a fax to the prospective sample companies to explain the survey's aims and inform them that we would be mailing the questionnaire to them in the following days. The survey was administered by mail using Dillman's method (2000). We included a cover letter written in French to improve the response rate. After the initial mailing, three follow-ups were conducted by e-mail, phone, and fax. A total of 62 companies responded to the questionnaire for an overall response rate of 20.6%. Table 1 below shows the business sectors of the respondents. Three semi-structured interviews were conducted with Moroccan management controllers to obtain rich data. The interviews were recorded, and notes were taken. The average duration of these interviews was 25 minutes. Table 1. Demographics of survey respondents by business sector Business sector Number % % Manufacturing 23 37.1 37.1 Services to businesses and particulars 22 35.5 Services Banking and insurance industry 8 12.9 62.9 Retail 9 14.5 Total 62 100 100 The association between Activity-Based Costing and performance: Empirical evidence from Moroccan companies Vol. 21, No. 1 31 3.2 Variable measurements To test our research model, we will first compare the organizational performance of the two populations (ABC adopters/non-adopters). Then, we will study the impact of the implementation of cost accounting on the perceived performance of the two populations (firm's adopting/non-adopting ABC). 3.2.1 Independent variable: Activity-Based Costing adoption To assess ABC adoption, we used the responses to the survey question about the status of ABC in each company. The survey results indicate that only 21% of companies had already implemented ABC, and 1.6% noted that ABC is being implemented in their firm. We estimate that 22.6% of the Moroccan companies have adopted ABC by summing the two percentages. In addition, 9.7% of the companies in our sample have examined the possibility of adopting ABC, and 67.7% point out that they were not considering adopting the ABC approach. Consequently, 77.4% of the Moroccan companies we surveyed have not adopted ABC. Table 2 below recapitulates these main results. Table 2. Status of ABC in Moroccan companies ABC adoption status Number of companies Percentag e Yes Currently using ABC or ABC is being implementation 14 22.6 No Currently considering ABC adoption 6 9.7 No consideration of ABC to date 42 67.7 Tota l 62,0 100,0 3.2.2 Dependent variable: company performance We have selected two measures of company performance. The first measure is the companies' overall performance, including quality, turnover, net profit/sales ratio, and customer satisfaction. A subjective five-scale rating is given to questions asked for all the companies in the sample. For this question, the respondents indicate whether the performance of their organizations has improved recently independently of the introduction of a cost system calculation. This variable is widely used in previous studies dealing with the relationship between ABC and performance (Cagwin & Bouwman, 2002; Ittner et al., 2002). In our study, we obtained a high Cronbach Alpha (0.831), which is acceptable for the reliability of the measurement scales (alpha more significant than 0.5). Figure 2 below summarizes the four dimensions of organizational performance selected for this study: Accounting and Management Information Systems 32 Vol. 21, No. 1 Figure 2: The four dimensions of organizational performance (adapted from Cagwin & Bouwman, 2002; Ittner et al., 2002) We have introduced a second measure to evaluate performance to deepen the analysis. This measure comprises quality, cost reduction, and financial performance (cf. Table 3). According to the literature, each element includes several items that could improve when ABC is adopted. In total, we selected nine items from the literature, and we obtained a high Cronbach Alpha (0.782), which is acceptable for the reliability of the measurement scales (alpha more significant than 0.5). - Quality: Improving the quality of products and services is often cited as one of the benefits of implementing ABC (Banker et al., 2008, Ittner et al., 2002). According to AFNOR (French Association of Normalisation), a good quality product or a service has characteristics that allow it to satisfy consumers' expressed or implicit needs. The final consumer is an essential client, but each service is both a client and a provider of other services within the organization. In this research, to measure quality, we used a subjective appreciation of the impact of ABC's adoption on the communication between services, the quality of products, and customers' satisfaction. This dimension is measured using three items based on a five-point scale where one is "strongly disagree" and five is "strongly agree." - Cost reduction: To measure the impact of ABC on cost reduction, we asked three subjective questions based on a five-point scale. Indeed, the introduction of activity-based Costing can reduce costs by eliminating activities with low valueadded characteristics, redefining pricing and pricing models, adopting new production models, and improving the design of products and services. - Financial performance: Financial performance was measured by answers to a subjective question. The impact of using information from the ABC system on economic performance is assessed based on a five-point scale. Performance Improving turnover Improving the net profit/sales ratio Improving the quality of product/service Improving customer satisfaction The association between Activity-Based Costing and performance: Empirical evidence from Moroccan companies Vol. 21, No. 1 39 Table 7. Wilcoxon and Mann-Whitney tests (a) a. Grouping criteria: [Status of ABC] Significant level : ** = 0,01 ; * = 0,05 Accounting and Management Information Systems 40 Vol. 21, No. 1 4.2.2 Median test The statistical results of the cost accounting impact on firms' performance appear in the fourth and sixth columns of Table 8. The results suggest that the proportion of companies that have adopted ABC above the median is higher than companies that did not adopt it. This median difference is statistically significant at the 5% significance level for most aspects of performance (cf. Table 9), which are: - The adoption of new production models and improvement of the design of products and services; - Decisions about processes, product design, and pricing strategies; - Reliable total cost calculation; - Improvement of customer satisfaction; - Better allocation of overhead; - Improving communication; and - Improving product quality. However, the criteria "redefining pricing and pricing models" and "improving financial performance" did not result in a statistically significant effect. Table 8. Number of observations below, above or equal to the median for adopters and non-adopters of ABC ABC status No (0) Yes (1) N1 % N2 % Redefining pricing and pricing models > Median 10 22.7% 5 41.7% <= Median 34 77.3% 7 58.3% The adoption of new production models and improvement of the design of products and services > Median 11 26.8% 9 75.0% <= Median 30 73.2% 3 25.0% Decisions about processes, product design, and pricing strategies > Median 8 19.5% 9 75.0% <= Median 33 80.5% 3 25.0% Reliable total cost calculation > Median 5 11.4% 5 41.7% <= Median 39 88.6% 7 58.3% Improvement of customer satisfaction > Median 11 26,2% 9 75,0% <= Median 31 73.8% 3 25.0% Better allocation of overhead > Median 2 4.7% 5 41.7% <= Median 41 95.3% 7 58.3% Improving communication > Median 10 26.3% 10 83.3% <= Median 28 73.7% 2 16.7% Improving the product quality > Median 9 24.3% 11 91.7% <= Median 28 75.7% 1 8.3% Improving financial performance > Median 12 27.9% 5 41.7% <= Median 31 72.1% 7 58.3% The association between Activity-Based Costing and performance: Empirical evidence from Moroccan companies Vol. 21, No. 1 41 Table 9. Median test (a) a. Grouping criteria: N°9 Status ABC Significance levels: ** = 0.01 ; * = 0.05 Accounting and Management Information Systems 42 Vol. 21, No. 1 Our results suggest that, on the whole, companies that have adopted ABC have been able to improve their performance significantly. This increase in performance is reflected in improved decision-making, communication, product quality, and customer satisfaction. These results confirm our hypothesis that the adoption of ABC has a positive effect that is more important than the traditional method on the nonfinancial performance of companies. From the preceding, we find that ABC has enabled Moroccan firms (1) to adopt new production models and improve the design of products and services; (2) to improve decision-making mechanisms for process management, product design, and pricing strategies; (3) to calculate costs reliably and to allocate overheads in a precise manner; (4) to improve customer satisfaction; (5) to improve the communication between the different divisions; and finally, (6) to increase the quality of the products. However, the direct relationship between the implementation of ABC and the improvement of financial performance has not been confirmed. 5. Conclusion and discussion This paper aims to examine the relationship between ABC adoption and performance companies. Previous research most often focused on the impact of ABC on financial performance. We want to explore this theme by studying, in addition to financial performance, non-financial performance. We tested the link between the adoption of the ABC and the overall performance. We also individually analyzed the connection between the adoption of the ABC and the items representing the performance. Overall, the results indicate that companies that have adopted ABC have improved their performance significantly. Indeed, its adoption has a positive effect that is more important than the traditional method on the non-financial performance of companies. However, a direct relationship between ABC and financial performance has not been confirmed. Our study is one of the first Moroccan contributions concerning the relationship between Activity-Based Costing and performance. It attempts to enrich the debate on the benefits of ABC and the role it could play to improve performance. The inputs consist of defining the dimensions, allowing us to determine what it could mean to enhance the firms' performances due to ABC's adoption, cement its beneficial effects, and evaluate this impact as objectively as possible. Previous studies have focused on the effect of ABC on financial performance without any convincing results. Our contribution has been to supplement these studies by introducing the impact of ABC on non-financial performance. Our results have shown an indirect relationship between the establishment of ABC and the firms' financial performance, which happens precisely through improved non-financial performance. For example, and based on the comments of one of the survey The association between Activity-Based Costing and performance: Empirical evidence from Moroccan companies Vol. 21, No. 1 43 participants, using ABC allowed his company "to have a much clearer vision of the use of resources, improve communication between the various departments/divisions, facilitate the reengineering of processes, increase the quality of services offered, better analyze cost allocations, and improve customer satisfaction." Only then, and over time, did these improvements in non-financial performance translate into better financial performance. Our results do not confirm those obtained by Zeghal and Bouchekoua (2000), Kennedy et al. (2001), and Cagwin and Bouwman (2002). According to these authors, there is a direct relationship between sales and financial performance. On the other hand, our results partially confirm the studies of Ittner et al. (2002), Bergeron and Belaïd (2006), and Banker et al. (2008). According to Ittner et al. (2002), ABC has an indirect and significant impact on production costs by improving the quality and duration of the production cycle. Our results also confirm those obtained by Bescos and Charaf (2013), Elhamma and Yi Fei (2013), Dubihlela and Rundora (2014), and Maiga (2014). Our study goes in the same direction by confirming the direct impact of ABC on the firms' non-financial performance by explaining a little more the types of non-financial performance that may be affected. In this sense, we have been able to demonstrate that the ABC has enabled Moroccan companies to (1) adopt new production models and improve the design of products and services; (2) improve decision-making mechanisms for process management, product design, and pricing strategies; (3) calculate costs reliably and allocate overhead in a precise manner; (4) improve customer satisfaction; (5) improve the communication between the different divisions, and finally (7) to increase the quality of the products. However, our work could not confirm the direct relationship between the implementation of ABC and the improvement of the firms' financial performance. Our results also confirm those obtained by Banker et al. (2008) by stating that ABC has no significant direct impact on financial performance but an indirect relationship through improved operational performance. We also found through our investigations that the conclusions of Bergeron and Belaïd (2006) show that companies that have adopted ABC use and exploit more information from their costing system than other firms. The anchoring of our research in the Moroccan context is the first contribution since it is undoubtedly, one of the first times research has been conducted in this country on the link between ABC and performance. But the most significant possible contribution of our research for companies is on other grounds. In particular, we have highlighted the perceived impact of the implementation of the ABC on the performance of companies adopting it in Morocco. Accounting and Management Information Systems 44 Vol. 21, No. 1 The interviews underline that the variable time must be considered to appreciate the link between ABC and performance. In practice, the objectives are inevitably hierarchical regarding time and cannot be realized in the short term or simultaneously. Some goals are achieved in the nine months following the implementation of ABC, while others take longer to be completed, such as those highlighting activities of no value. Thes expected benefits to firms' performance cannot be delivered immediately and simultaneously. Also, the operationalization of some variables used in our research presents some limits. This is particularly the case for the classification of cost systems used by Moroccan companies (traditional, ABC), the measurement of the adoption rate of the ABC, and the measurement of organizational performance. Using perceptual indicators to evaluate the latter is another limitation because perceptual measures introduce bias in responses. Past performance research also indicates the difficulty of adopting a satisfactory definition of this concept. The approach we propose, however, partially addresses this constraint since we retained three definitions of performance to test the impact of ABC on performance: (1) achieving objectives; (2) obtaining financial and non-financial improvements; and (3) stakeholders' perceptions of the benefits of ABC, particularly in the decision-making process. The results obtained regarding these three aspects agree with each other. The generalization of our results should therefore be considered with caution. Indeed, the number of responses we collected for our survey is low (62 companies). This number of responses did not allow us to use more advanced statistical tools such as structural equations. Finally, future research should lead to a collective case study to replicate the results obtained in several public or private organizations. 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The association between Activity-Based Costing and performance: Empirical evidence from Moroccan companies Vol. 21, No. 1 47 Appendix: The main contributions of articles dealing with the relationship between ABC and performance (2000-2019) Authors Objectives Sample Indicators Results Zéghal and Bouchekoua, (2000) This study measures the effects of adopting managerial innovations such as just-in-time, quality management, and ABC on the performance of North American companies. 571 US companies (67) Economic Value Added (EVA) Companies that have adopted one of the three managerial innovations have significantly increased the economic value added after adoption. Kennedy et al. (2001) This study examines the relationship between the implementation of the ABC and the creation of shareholder value. 853 companies in England (234) Holding Period Returns (HPR), cumulative Abnormal Returns (CAR) The value of the shares of companies that have adopted the ABC increases faster than those firms that have not implemented ABC. Cagwin and Bouwman (2002) This study discusses the association between the use of ABC and the improvement of firms' financial performance. 990 working internal auditors who are members of the U.S. Institute of Internal Auditors in the U.S. (2010) Return On Investment (ROI) The adoption of ABC positively impacts the ROI in companies with specific characteristics (importance of cost structure, complexity, diversity.). Ittner et al. (2002) This study evaluates the association between ABC and companies' operational and financial performance. 25,361 US companies (2,789) Return on net plant assets, product quality, production cycle time, cost variations. The extensive use of ABC has an indirect and significant effect on production costs by improving the quality and production cycle time. Bergeron and Belaïd, (2006) This study analyzes the impact of the use 800 Quebec, Canada Product quality, production and A positive relationship exists between the use of cost and performance Accounting and Management Information Systems 48 Vol. 21, No. 1 Authors Objectives Sample Indicators Results of ABC on the performance of companies in Quebec, Canada. It examines the applicability of ABC for Quebec industrial SMEs by examining its effects on performance. industrial SMEs (34) delivery time, production cost variations information. However, there is no relationship between ABC and firm performance. Banker et al., (2008) This paper evaluates the impact of ABC on the adoption of new production practices and plant performance. 27,000 operational and management controllers of U.S. companies (1,250) Product quality, production cycle time, variation of p roduction unit costs ABC has an indirect impact on plant performance. Bescos and Charaf (2013) Examine Relationship between ABC adoption and performance One Moroccan case study Financial and organizational performance ABC adoption has a positive impact on financial performance (cost reduction, improving productivity, improving profitability) and organizational performance (improving communications, improving quality, ability to calculate the number and cost of activities of movementcontrol values, business registration, and monitoring of technical incidents reported by managers of the bank). El Hamma and Yi Fei (2013) Relationship between ABC, business strategy and performance 48 Moroccan industrial firms Firm strategy Competitivity Profitability The strategy had not a significant impact on ABC adoption. The use of ABC results in an increase in competitiveness, profitability, and general performance, both in prospector and defender companies.