Managerial Discretion and Expense Preference Behavior

Open Access
Publisher Website
Google Scholar
Abstract
Considerable debate has raged over the economic assumption that the large corporation, through the decisions of its managers, attempts to maximize its profits. Closely related to the notion of profit maximization is expense preference behavior of managers which would indicate a "preference" for expenses over firm profit. This study examines the market structure effects on expense preferences behavior and, for the first time, tests are made using data which unambiguously reflect market structure differences between firms in the sample. The results provide evidence that is contrary to the expense preference hypothesis.

This publication has 0 references indexed in Scilit: