No description available.

No description available.

No description available.

No description available.

No description available.

No description available.

No description available.

No description available.

No description available.

This dissertation examines how managers make cost decisions under significant economic events. The economic events of interests are the economic crisis from 2008 to 2010 and corporate loan financing. The economic crisis caused many firms to experience sales declines and created tremendous pessimism about prospects of sales rebounding in the future. I find that not all firms were affected equally. Sales-down firms exhibit anti-sticky cost behavior during this period; that is, costs are cut back more steeply as sales fall than they increase as sales rise. Such a behavior during the economic crisis is exactly the opposite of the average sticky cost behavior during normal economic periods documented in prior accounting research. This, in turn, implies that net income and cash flows from operations (as percentage of sales) may increase, rather than decrease for sales-down firms during an economic downturn. In the second study, I use a difference-in-difference research design to examine whether and how managers engage in cost management before and after loan financing. I find that managers significantly cut back operating expenses prior to loan financing. However, cost reduction is asymmetric with respect to the direction of sales changes. Compared with firms experiencing sales increases, firms experiencing sales declines reduce costs to a greater extent prior to financing and also exhibit a reversion in the cost level after financing. The reversion in cost level is negatively related to the percentage of financial covenants that are based on earnings. I do not find consistent evidence supporting that managers engage in accrual management, overproduction or asset sales. / Business Administration/Interdisciplinary