CEO conscientiousness and asymmetric SG&A cost behavior

Heung-Jae Jeon, Kyeongheum Ra and Jonghwan (Simon) Kim

Applied Economics, 2025, vol. 57, issue 41, 6515-6535

Abstract: This research investigates the impact of CEO conscientiousness on asymmetric SG&A (Selling, General, and Administrative) cost behaviour. Utilizing a dataset comprising S&P 1500 companies during the timeframe spanning from 2008 to 2019, our findings demonstrate a negative relationship between CEO conscientiousness and the magnitude of cost stickiness. We affirm the robustness of our primary findings through a change analysis, accounting for CEO overconfidence, and employing entropy balancing techniques. Furthermore, our research reveals that the negative association between CEO conscientiousness and cost stickiness is attenuated in situations characterized by high levels of R&D intensity. In sum, this study posits that CEO conscientiousness exerts a noteworthy influence on choices pertaining to resource allocation.

Date: 2025
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DOI: 10.1080/00036846.2024.2385752

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