 Consumer Sentiment, Managerial Expectations and Resource Adjustment DecisionsSven Hartlieb European Accounting Review, 2023, vol. 32, issue 2, 481-511 Abstract: This study presents evidence on the relationship between consumer sentiment and resource adjustment decisions. Consumer sentiment is an important piece of economic information, accepted as a reliable predictor of future economic activity, which is why it should influence managerial expectations underlying future-oriented resource adjustment decisions. In line with these considerations, I find that managers are more likely to retain slack resources following a decrease in sales when consumer sentiment about future business prospects is improving. Managers seem to adopt consumers’ optimism about future economic prospects by deciding to stall resource adjustments until sales recover to avoid current and future adjustment costs, thus increasing firms’ level of sticky cost behavior. Together with various additional analyses, this study provides new insights into managers’ resource adjustment decision-making process and enhances our understanding of the information upon which managers form their expectations. Date: 2023 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:euract:v:32:y:2023:i:2:p:481-511 Ordering information: This journal article can be ordered from DOI: 10.1080/09638180.2021.1986091 Access Statistics for this article European Accounting Review is currently edited by Laurence van Lent More articles in European Accounting Review from Taylor & Francis Journals |
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