In Too Deep: The Effect of Sunk Costs on Corporate Investment

IF 7.6 1区 经济学 Q1 BUSINESS, FINANCE
MARIUS GUENZEL
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引用次数: 0

Abstract

Sunk costs are unrecoverable costs that should not affect decision making. I provide evidence that firms systematically fail to ignore sunk costs and that this leads to significant investment distortions. In fixed-exchange-ratio stock mergers, aggregate market fluctuations after parties enter into a binding merger agreement induce plausibly exogenous variation in the final acquisition cost. These quasi-random cost shocks strongly predict firms' commitment to an acquired business following deal completion, with an interquartile cost increase reducing subsequent divestiture rates by 8% to 9%. Consistent with an intrapersonal sunk cost channel, distortions are concentrated in firm-years in which the acquiring CEO is still in office.

太深:沉没成本对企业投资的影响
沉没成本是指不应影响决策的不可收回成本。我提供的证据表明,企业没有系统性地忽视沉没成本,这导致了严重的投资扭曲。在固定交易比率的股票并购中,在各方达成具有约束力的并购协议后,总市场波动会导致最终收购成本出现貌似合理的外生变化。这些准随机成本冲击强有力地预测了公司在交易完成后对收购业务的承诺,四分之一成本的增加使随后的剥离率降低了8%至9%。与个人沉没成本渠道相一致的是,扭曲集中在收购方CEO仍在职的公司年度。
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来源期刊
Journal of Finance
Journal of Finance Multiple-
CiteScore
12.90
自引率
2.50%
发文量
88
期刊介绍: The Journal of Finance is a renowned publication that disseminates cutting-edge research across all major fields of financial inquiry. Widely regarded as the most cited academic journal in finance, each issue reaches over 8,000 academics, finance professionals, libraries, government entities, and financial institutions worldwide. Published bi-monthly, the journal serves as the official publication of The American Finance Association, the premier academic organization dedicated to advancing knowledge and understanding in financial economics. Join us in exploring the forefront of financial research and scholarship.
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