Rigid Cost Structures as a Preemptive Strategy

• 成果类型: Article
• 署名作者: Artz, Martin; Holzhacker, Martin; Hoppe, Andre
• 署名单位: University of Munster; Michigan State University; Michigan State University's Broad College of Business; KU Leuven
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826; 1558-7967
• DOI: 10.2308/TAR-2023-0506
• 发表日期: 2026-03
• 页码: 1-31
• 关键词: product market competition; strategic behavior; import tariffs; Cost Structure; Product market competition; capital structure; Ownership structure; firm performance; supply contracts; adjustment costs; Real options; entry; RISK; uncertainty

摘要

We examine whether firms strategically increase cost rigidity to adopt an aggressive product market stance. Using large cuts in industry-level import tariff rates as a setting, we find that domestic firms respond to a looming competitive threat from foreign rivals by raising cost rigidity. This increase cannot plausibly be explained by investments to create physical excess capacity, suggesting firms enter cost commitments for labor and procurement instead. Additional tests corroborate the hypothesized preemptive intent. First, the increase in cost rigidity is concentrated in industries in which a firm's aggressive market stance elicits a softening of competition. Second, it is only in these industries that firms with rigid cost structures experience market share gains around a large tariff cut. The latter effect is more pronounced the more reliably firms' cost structures can be discerned from their financial statements. Overall, our study suggests that firms enter cost commitments as a preemptive strategy.