Together with co-authors Dr. André Hoppe from KU Leuven and Martin Holzhacker from Michigan State University, Martin Artz has recently published a new research article, "Rigid Cost Structures as a Preemptive Strategy" in the journal "The Accounting Review", one of the best journals in our field worldwide.

Their study empirically examines whether firms strategically increase cost rigidity in anticipation of competitive threats to commit themselves to a more aggressive output stance. Using reductions in U.S. import tariff rates as a quasi-natural experiment, they show that domestic firms respond to heightened competitive threat from foreign rival firms by making their cost structures more rigid. The authors, therefore, introduce cost rigidity as a distinct strategic instrument to soften competition and contribute to the cost behavior literature by highlighting its proactive, competitive role.

The paper is open access, and the full article can be downloaded here.