| Summary: | 碩士 === 國立中正大學 === 會計與資訊科技研究所 === 102 === Prior studies have documented the asymmetrical behavior of selling, general and administrative (SG&A) costs, and argue that SG&A cost asymmetry is partially driven by managerial agency incentives. On the other hand, researchers argue that financial analysts facilitate more effective monitoring of firms’ activities and, thereby, reducing agency costs. This study integrates the two streams of research by examining the relationship between analyst following and the degree of cost asymmetry. Using data for the US firms over the period 1990-2012, we find that there is a negative association between analyst following and the degree of cost asymmetry. Our results suggest that financial analysts play an important governance role by preventing empire-building managers from over-spending on SG&A costs.
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