Browsing by Author "Costa MD"
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- ItemCost stickiness and firm value(Springer-Verlag GmbH, 2023-08-14) Costa MD; Habib A; Verbeeten FIn this paper we explore the association between cost stickiness and firm value. Using a large sample of U.S. data, we find a robust negative relationship between cost stickiness and firm value. We then explore whether the resource adjustment, managerial expectations, and agency theories of cost stickiness affect the negative relation and find support for the managerial expectation and agency theories. Furthermore, we find evidence that the detrimental impact of cost stickiness on firm value is mediated partially through the cost of equity and cash flow channels. Further investigation suggests that the adverse effects of cost stickiness on firm value is stronger in the presence of high information asymmetry. We enrich the cost management literature by integrating cost stickiness with corporate finance.
- ItemOil Price Volatility, Organization Capital, and Firm Performance(Pompea College of Business, University of New Haven, 2022-11) Kamal JB; Costa MD; Habib AWe examine the relationship between oil price volatility and firm performance, and the moderating role of organization capital on this relationship. Using U.S. firm-level data during the period of 1986-2017, our analysis reveals several key findings. Consistent with the real option theory, we find that oil price volatility negatively affects firm performance. However, this adverse effect of oil price volatility is reduced for firms with high levels of organization capital. Interestingly, this moderating effect of organization capital is more pronounced for firms with large cash holdings. Overall, our findings substantiate the idea that firms with high levels of organization capital can hedge oil price related volatilities effectively. Findings from several robustness tests support our key results.