Thursday, December 7th
11.00h – 12.00h Ine Paeleman, UGent: “Do firms consume or stockpile financial slack during an environmental jolt? Evidence from a quasi-natural experiment.”
Using the recent financial crisis as a quasi-natural experiment and drawing on organizational and economic theory, we investigate how an environmental jolt affects firms’ level of financial slack. While organizational theorists suggest that managers will consume financial slack during an environmental jolt to protect their firms’ technical core, financial economists suggest that a precautionary motive will drive managers to stockpile financial slack. Using longitudinal data of 95,366 Belgian firms, we contrast these seemingly incongruent perspectives by showing that young firms and firms with lower creditworthiness (i.e., firms with lower legitimacy) will consume financial slack during the financial crisis, while old firms and firms with higher creditworthiness will stockpile financial slack during the financial crisis. Moreover, we clarify key mechanisms and managerial actions underlying these relationships.
12.00h – 13.00h Piyada Daowadueng: “Complex costing systems: an analysis of antecedents and their usefulness”
Costing systems vary from very simple costing techniques to complex systems of detailed cost allocation and cost estimation. Whether or not more complex costing systems also lead to increased usefulness is still an issue of debate. Prior studies resulted in mixed findings (Kallunki and Silvola, 2008; Al-Omiri and Drury, 2007; Drury and Tales, 2005; Pizzini, 2006; Abernethy et al., 2001; Datar and Gupta 1994; Labro and Vanhoucke 2007). In order to shed more light on the relationship between the level of cost complexity of a cost system and its usefulness, we address two research questions. First based on contingency theory we formulate hypotheses with respect to the drivers of the adoption of more complex costing systems in companies. These hypotheses allow us to identify when firms do adopt more complex cost systems. Second using a cognitive psychology theory, we develop hypotheses on the relationship between the complexity costing systems and their usefulness. We define cost usefulness as providing cost information for decision making, as providing cost information that satisfies the users, and providing cost information that is accurate. In this study we capture cost systems complexity by focusing on the level of detail applied in the allocation of costs to cost objects and on the diversity of costing systems used in a company. Survey data collected from Thai medium and large manufacturing and service firms are used to test the hypotheses.
With this study we contribute to the literature by distinguishing between antecedents that trigger the adoption of more complex cost allocation systems and antecedents that trigger the adoption of a wider set of different costing systems in the company. The results show that the adoption of more complex cost allocation systems in all industry and manufacturing industry is significantly related with operational turbulence and IT-integration, the adoption of different types of product costing systems in all industry and manufacturing industry is associated with the level of IT-integration. In addition the results also provide evidence that the relationship between the adoption of complex cost systems and cost usefulness is fully mediated by the level of knowledge creation.