Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Management Overconfidence, Sg&A (Selling, General & Administrative) Stickiness Signaling, and Sustainable Future Performance

Author(s): Namryoung Lee

This study explores the link between SG&A stickiness signaling and sustainable future performance, as well as the impact of management overconfidence on this relationship. The findings show that SG&A stickiness signaling is favorably related to corporate future success, and this positive link is higher in the case of a sales decrease. This suggests that an increase in the SG&A to sales ratio during a period of dropping sales may be seen as indicating good future performance. Furthermore, as the study's focus, the findings demonstrate that SG&A stickiness signaling when sales decline has a greater impact on sustainable future performance when management overconfidence exists, supporting previous research that SG&A stickiness can boost long-term future performance when management is overconfident. This study has the potential to shift the perception of managerial overconfidence, which has previously been seen to be detrimental to a company.

Get the App