Does Community Social Capital Affect Asymmetric Cost Behaviour?

49 Pages Posted: 7 Aug 2017 Last revised: 21 Feb 2019

See all articles by Sven Hartlieb

Sven Hartlieb

University of Bamberg

Thomas R. Loy

University of Bremen

Brigitte Eierle

University of Bamberg

Date Written: February 17, 2019

Abstract

In this study, we examine the impact of community social capital on asymmetric cost behaviour. Community 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 channels. We find that firms headquartered in U.S. counties with high social capital exhibit significantly less asymmetry in cost behaviour. Community social capital restrains managers from taking opportunistic resource adjustment decisions that would induce cost stickiness. This is in line with our additional finding, that cooperative norms acting in an ethical manner are the dominant channel for our setting, by which community social capital affects cost behaviour. Our results corroborate the important role of managerial discretion in cost behaviour and make a significant contribution in understanding how local environmental factors explain differences in firms’ sticky cost behaviour.

Keywords: Cost Behaviour, Cost Stickiness, Social Capital, Norms, Managerial Opportunism

JEL Classification: A13, M14, M40, M41

Suggested Citation

Hartlieb, Sven and Loy, Thomas R. and Eierle, Brigitte, Does Community Social Capital Affect Asymmetric Cost Behaviour? (February 17, 2019). Management Accounting Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3013837 or http://dx.doi.org/10.2139/ssrn.3013837

Sven Hartlieb (Contact Author)

University of Bamberg ( email )

Kirschaeckerstrasse 39
Bamberg, 96045
Germany

Thomas R. Loy

University of Bremen ( email )

Universitaetsallee GW I
Bremen, D-28334
Germany

Brigitte Eierle

University of Bamberg ( email )

Feldkirchenstraße 21
Bamberg, 96052
Germany
00499518632545 (Phone)

HOME PAGE: http://www.uni-bamberg.de/bwl-irwp/home/

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