ABSTRACT Opportunistic overspending tendencies induce inflexible cost adjustments and encourage bad cost stickiness. To examine whether this perspective applies to public sector organizations (PSOs) and mergers, we test the asymmetric cost behaviors, (1) free riding and (2) empire building, associated with managerial incentives in merged Japanese municipal enterprises. Consequently, we find evidence that prior to mergers, administrators’ opportunistic spending originating from free-riding behavior affects cost stickiness; conversely, an analysis of the post-merger sample shows that the empire-building incentive might partly mitigate sticky costs. Our results corroborate the contradictory role of managerial discretion in resource adjustment decisions between pre- and post-mergers.

中文翻译：

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日本市政企业合并前后的搭便车、帝国建设和成本管理

摘要 机会主义的超支倾向导致不灵活的成本调整并鼓励不良的成本粘性。为了检验这种观点是否适用于公共部门组织 (PSO) 和合并，我们测试了与合并的日本市政企业的管理激励相关的非对称成本行为，（1）搭便车和（2）帝国建设。因此，我们发现有证据表明，在合并之前，管理者因搭便车行为而进行的机会主义支出会影响成本粘性；相反，对合并后样本的分析表明，建立帝国的激励措施可能会部分降低粘性成本。我们的结果证实了管理自由裁量权在合并前后资源调整决策中的矛盾作用。