Intra-industry benchmarking of SG&A expenses: a neo-institutional perpsectiveIntra-industry benchmarking of SG&A expenses: a neo-institutional perpsective
Faculty of Applied Economics
Accountancy and Finance
Antwerp :UA, Faculty of Applied Economics, 2006[*]2006
Research paper / UA, Faculty of Applied Economics ; 2006:032
University of Antwerp
In this paper we study conformity tendencies in SG&A (Selling, General and Administrative expenses) reporting from a mimetic imitation perspective. We explore intra-industry conformity tendencies in reported SG&A relative to sales over a ten-year period among a sample of US firms. We measure conformity by comparing a firms SG&A profile against a reference group of industry model firms. Results suggest that a firms imitation of successful firms SG&A profiles is determined by the tendency of other industry members to imitate those reference models. Moreover, results suggest that the mimetic process is strengthened with higher environmental uncertainty and that large auditor networks function as facilitators for this type of socially-based imitation behavior. Different modes of trait imitation in SG&A reporting seem to coexist as long as the reference groups are defined in terms of size and profitability.