Do managers intentionally use sticky costs to signal private information? Evidence from repurchase tender offers

• Main Authors: Chien-TingYen, 顏千婷
• Other Authors: Ting-Kai Chou
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/945f3r

碩士 === 國立成功大學 === 會計學系 === 104 === The previous academic literature on sticky costs mostly focused on resource adjustment inefficiency or agency problems. However, there is little evidence on whether managers intentionally use sticky costs to signal private information. We find that the degree of sticky costs is significantly higher for fixed-price repurchase tender offers than Dutch-auction tender offers. In other words, managers who adopt fixed-price repurchase tender offers intentionally use sticky costs to signal managerial optimism. Furthermore, we also find that the signaling effect of sticky costs is stronger for firms with less analyst coverage and lower institutional ownership. Overall, our evidence show that managers could use sticky costs as a signal of business prospects.