Telfer Research Seminar Series and AGRC - Nourhene Ben Youssef
Navigating Cost Behaviour during Covid-19 Uncertainty: Government Interventions and Managerial Traits
Deadline: March 1, 2024,
***M.Sc. Students, this event can count towards one of the six mandatory Research Seminars Series needed to attend (MGT 6191/ MGT 6991 / MHS 6991).***
Nourhene Ben Youssef, PhD
This study examines firms' asymmetric cost management in response to the exogenous demand shock of the Covid-19 pandemic. Due to the high uncertainty and extensive government interventions to curb the virus, firms faced unprecedented challenges in cost management. To assess this asymmetric cost behavior, we develop a cross-sectional measure of abnormal sales, general, and administrative (SG&A) cost, representing the deviation from a benchmark model. Analyzing a sample of 1,858 North American firms, we find that annual abnormal SG&A was -2.93% translating to approximately $ -93 billion across our sample firms. This finding indicates a high degree of anti-cost stickiness, suggesting that managers were anticipating a persistent future sales decline. Interestingly, some firms with optimistic CEOs displayed significantly lower levels of anti-cost stickiness, indicating the relevance of behavioral traits in cost management. Our findings highlight a significant positive association between government stringency to curb the virus and anti-cost stickiness. This underscores the importance of government policy in shaping firms' expectations of economic challenges, particularly amid uncertainty.
About the Speaker
Professor Ben Youssef conducts research in the areas of auditing, corporate governance, corporate reporting, family firms, and data privacy. She has published in various accounting and finance journals, including, Accounting and Finance, International Journal of Auditing, Journal of International Accounting, Auditing and Taxation, and Accounting in Europe. Prior to the joining the faculty at the University of Sherbrooke, Professor Ben Youssef served as a faculty member at the University of Regina.