Do Earnings Targets and Managerial Incentives Affect Sticky Costs?

• 成果类型: Article
• 署名作者: Kama, Itay; Weiss, Dan
• 署名单位: Tel Aviv University
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2012.00471.x
• 发表日期: 2013
• 页码: 201-224
• 关键词: management; real; INVESTMENT; BEHAVIOR

摘要

This study explores motivations underlying managers resource adjustments. We focus on the impact of incentives to meet earnings targets on resource adjustments and the ensuing cost structures. We find that, when managers face incentives to avoid losses or earnings decreases, or to meet financial analysts earnings forecasts, they expedite downward adjustment of slack resources for sales decreases. These deliberate decisions lessen the degree of cost stickiness rather than induce cost stickiness. The results suggest that efforts to understand determinants of firms cost structures should be made in light of the managers motivations, particularly agency-driven incentives underlying resource adjustment decisions.