Market Reaction to Asymmetric Cost Behavior: The Impact of Long term Growth Expectations
| Autor: | Farshad Sabzalipour, Ghareibeh Esmailikia, Mehran Ahmadi |
|---|---|
| Jazyk: | perština |
| Rok vydání: | 2024 |
| Předmět: | |
| Zdroj: | پژوهشهای تجربی حسابداری, Vol 14, Iss 2, Pp 121-154 (2024) |
| Druh dokumentu: | article |
| ISSN: | 2251-8509 2538-1520 |
| DOI: | 10.22051/jera.2024.45829.3190 |
| Popis: | Long-term growth expectations refer to the expected activity and company profitability. These expectations affect managers' decisions about changing resources and cost behavior. This research aims to study the capital market's reaction to the cost asymmetric behavior of long-term growth expectations. The sample includes 155 firms admitted to the Tehran Stock Exchange from 1394 to 1400. Multiple regression models have been used to test the hypotheses. The findings show that, in firms with high versus low long-term growth expectations, cost stickiness is more asymmetric. Also, the findings showed that the capital market reacts negatively to unexpected cost stickiness. Also, investors react more negatively to unexpected cost stickiness for a firm with high long-term growth expectations than for one with low ones. Managers' economic motives are one of the main drivers of asymmetric cost behavior. Firms that expect higher future growth rates tend to reduce the risk of idle capacity by increasing investment. Investors also revise their evaluations in case of an increase in unexpected cost stickiness. This study adds to the literature on management accounting and capital markets. It documents the market's reaction to asymmetric cost behavior. It also links this cost behavior, a key area of management accounting, to investors' actions in the capital market. |
| Databáze: | Directory of Open Access Journals |
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