Stakeholder Orientations and Cost Management

• 成果类型: Article
• 署名作者: Liu, Xiaotao (Kelvin); Liu, Xiaoxia; Reid, Colin D.
• 署名单位: Northeastern University; Hohai University; Washington & Lee University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12389
• 发表日期: 2019
• 页码: 486-512
• 关键词: CORPORATE GOVERNANCE; institutional investors; nonfinancial disclosure; international evidence; AGENCY COSTS; earnings; MARKET; OWNERSHIP; firm; SALIENCE

摘要

We examine the effect of stakeholder orientation on firms' cost management as proxied by selling, general, and administrative (SG&A) cost stickiness. Using a sample of 19,783 firm-years, we find that customer and employee orientation are associated with greater SG&A cost stickiness. Furthermore, the effect of customer orientation on SG&A cost stickiness is more prominent in firms where SG&A costs create high future value, growth firms, and firms with strong corporate governance. In contrast, the effect of employee orientation on SG&A cost stickiness is stronger in firms where SG&A costs create low future value, mature firms, and firms with weak corporate governance. Overall, the association between customer orientation and SG&A cost stickiness is consistent with efficiency considerations (i.e., adjustment costs). In contrast, the association between employee orientation and SG&A cost stickiness is consistent with agency motives such as empire building or a preference for a quiet life. In sum, we provide evidence that corporate orientation toward different stakeholders can have different efficiency implications in the context of SG&A resource adjustments and cost management.