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Loy, Thomas ; Hartlieb, Sven ; Eierle, Brigitte:
Does Social Capital Affect Asymmetric Cost Behaviour? Evidence from U.S. Counties.
2018
Veranstaltung: 41st Annual Congress of the European Accounting Association
, 30.05.2018-01.06.2018
, Mailand, Italien.
(Veranstaltungsbeitrag: Kongress/Konferenz/Symposium/Tagung
,
Vortrag
)
Abstract
We examine the impact of social capital on asymmetric cost behaviour. Social capital captures the strength of social norms and the density of social networks in a region. As such, it is a socio-economic factor that might affect managerial resource adjustment decisions via different chan-nels. We find that firms headquartered in U.S. counties with high social capital exhibit signifi-cantly less asymmetric cost behaviour. Social capital restrains managers from taking opportunis-tic resource adjustment decisions that would induce cost stickiness. This is in line with our addi-tional finding, that cooperative norms to act in an ethical manner are the dominant channel for our setting, by which social capital affects cost behaviour. Our results corroborate the important role of managerial discretion in cost behaviour and make a significant contribution in understand-ing how environmental, local factors explain differences in sticky cost behaviour across firms.