dc.description.abstract | In this study, we examined the relationship between the differentiation strategy and cost asymmetry. The choice of strategy is closely related to firm’s operating. In this study, we assumed that the differentiation strategy will affect the manager’s decisions on resource adjustment cost. That means the differentiation strategy firm choose will affect the cost asymmetry.
Using listed on TSE, OTC, and Emerging-Market companies in Taiwan from 1987 to 2013 as the research sample, we use differentiation strategy as our main strategy choice. The empirical results show that when firms have higher degree of differentiation strategy, they will exhibit greater cost stickiness. Furthermore, the relationship between the differentiation strategy and cost asymmetry also are moderated by the optimistic or pessimistic expectation of managers for future. The empirical result shows that under an optimistic scenario, firms with higher degree of differentiation strategy will exhibit greater cost stickiness. Conversely, under the pessimistic scenario, firms with higher degree of differentiation strategy will exhibit smaller cost anti-stickiness.
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