Intra-industry benchmarking of SG&A expenses: A neo-institutional perspective
AbstractIn this paper we study conformity tendencies in SG&A (Selling, General and Administrative expenses) reporting from a mimetic imitation perspective. We explore intra-industry conformity tendencies in reported SG&A relative to sales over a ten-year period among a sample of US firms. We measure conformity by comparing a firm’s SG&A profile against a reference group of industry model firms. Results suggest that a firm’s imitation of successful firms’ SG&A profiles is determined by the tendency of other industry members to imitate those reference models. Moreover, results suggest that the mimetic process is strengthened with higher environmental uncertainty and that large auditor networks function as facilitators for this type of socially-based imitation behavior. Different modes of trait imitation in SG&A reporting seem to coexist as long as the reference groups are defined in terms of size and profitability.
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Bibliographic InfoPaper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2006032.
Length: 51 pages
Date of creation: Dec 2006
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Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
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SG&A reporting; Overhead costs; Neo-institutional theory; Cost allocation; Imitation behavior;
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