Decomposing Cost Asymmetry: The Role of Global Risk Preferences

Activity: Talk or presentationScience to science

Description

A growing body of research documents an asymmetric behavior of costs, implying that costs rise more in response to revenue increases than they drop for revenue decreases. This cost behavior is ascribed to managerial decisions on resource commitment. In this study, we further explore this asymmetry by decomposing it into resource adjustments following sales increases and sales decreases and develop hypotheses on how these may be affected by varying risk preferences across countries. To test our hypotheses, we use panel data on 3,558 companies across nine industry sectors from 26 countries around the world over the period of six years (2008-2013). We contribute to existing literature on asymmetric cost behavior in considering the role of risk preferences in different domains as well as the role of industry performance as a reference point for managerial decision-making on resource commitment.
Period9 Aug 201914 Aug 2019
Event titleAAA Annual Meeting
Event typeUnknown
Degree of RecognitionInternational

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 211903 Science of management
  • 502006 Controlling
  • 502033 Accounting