Using a sample of publicly listed U.S. companies covering theperiod 1992-2019, we examine how managers respond in terms of asymmetric costbehavior when their firms are located in the neighborhood of a county hit by anatural disaster. Because natural disasters induce uncertain market conditions,they constitute a perfect setting to explore managerial behaviors in order topredict whether these neighbor firms would assume a sticky cost behavior. Wefind that neighbor firms of disaster areas react expecting an increase offuture demand lowering the same SG&A costs (anti-sticky behavior).Furthermore, we assess whether our first results are driven by an empirebuilding behavioral approach, exploring specific characteristics of the CEOs(CEO tenure, CEO age and CEO compensation) of the neighbor firms. We find apositive relation between anti-sticky cost behavior and neighbor firms whenCEOs are younger and have lower compensations and finally for CEOs with shortertenures. Overall, our results lead to conclude that corporate anti-sticky costbehavior is determined by a mitigated CEOs empirebuilding approach.

The seminar will be held both in presence and online