Effects of the adoption of management control practices on profitability: evidence from Latin America

• Mauricio Melgarejo ^[1] ; Carlos Rodríguez ^[3] ; Jose Torres ^[2]
  1. [1] Butler University

     Butler University

     Township of Center, Estados Unidos

     
  2. [2] Rice University

     Rice University

     Estados Unidos

     
  3. [3] INCAE Business School, Alajuela, Costa Rica

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• Localización: Revista española de financiación y contabilidad, ISSN 0210-2412, Vol. 51, Nº 1, 2022, págs. 1-20
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • This paper studies the impact of the adoption of different management control practices (MCP) on the firms’ financial performance in Latin America. We use the perspective of the attention-based view theory to argue that firms adopting MCP that cover different areas are more likely to attain higher financial performance, as adopting a diverse set of control practices contributes to distributing managerial attention. Thus, relevant business areas are monitored more comprehensively. We compare the performance effect of seven MCP in three areas (monitoring, operations, and targets) alone and combined using a panel dataset on 57 Latin American firms from 1995 to 2016, finding support for our arguments. Moreover, we find that the firms’ strategy moderates the financial performance effect of the adoption of MCP.