Mashruwala, RajAnderson, MarkWang, Ye2023-09-132023-09-132023-09-06Wang, Y. (2023). Cost uniqueness: an alternative lens for examining cost behavior (Doctoral thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca.https://hdl.handle.net/1880/116997https://doi.org/10.11575/PRISM/41841Cost information is a critical input required for profit analysis, earnings estimation, and firm valuation by capital market participants (Banker and Chen 2006; Weiss 2010; Ciftci et al. 2016). Conventional methods of understanding cost behavior seek to separate costs based on their movements relative to production volume. In a set of three essays, I investigate an alternative lens for examining cost behavior. In my approach, I seek to separate cost movements driven by firm-specific factors from movements that are common to industry or market peers. I refer to this as “cost uniqueness”. In the first of my essays, I describe this new construct of cost uniqueness, and I identify a method to empirically measure this new construct. Firm-specific cost variations are of special interest because costs reflect the inner workings of the firm that are opaque to investors. To establish the importance of measuring cost uniqueness, I investigate the effects of cost uniqueness on information uncertainty for external users by looking at the forecasting difficulty faced by financial analysts. In my second essay, I conduct an exploratory investigation into the forces that potentially drive some firms to be more unique than others. I organize my search around three distinct forces that can shape costs, namely, internal firm characteristics, external environment, and manager-specific characteristics. Within these three dimensions, I specifically examine various factors pertaining to the incentives and capabilities of firms to operate distinctively from their peers. In my third essay, I delve into some of the implications of cost uniqueness for firms. I examine the relationship between cost uniqueness and firm value to assess whether cost uniqueness is driven by managers’ value-enhancing activities or by value-destroying activities. I also investigate what measures a firm can take to mitigate the information uncertainty associated with cost uniqueness. Specifically, I examine whether firms increase their disclosure of cost items to help outsiders unpack cost uniqueness.enUniversity of Calgary graduate students retain copyright ownership and moral rights for their thesis. You may use this material in any way that is permitted by the Copyright Act or through licensing that has been assigned to the document. For uses that are not allowable under copyright legislation or licensing, you are required to seek permission.Cost UniquenessInformation UncertaintyFirm ValueAccountingdoctoral thesis