ART - FEDERAL CONTRACTORS AND STICKY SELLING, GENERAL, AND ADMINISTRATIVE (SGA) COSTS, 2016

The document discusses a study that focuses on federal focus firms and their performance compared to control firms. The study uses data from Compustat, Fundamental Annual for the years 1993-2012 and identifies 35 unique companies as federal focus firms. These firms are from various industries, including manufacturing, construction, and educational services. The study's approach differs from prior work, which used Fedspending.org to identify publicly traded companies with defense contracts. The control sample consists of active and inactive Compustat firms, and various data cleaning steps are taken to ensure the quality of the data. The study finds that sticky costs only show up in the estimation results after extensive data cleaning. The final analysis includes 269 federal focus firms and 39,539 control firms. The imbalance between the number of control and federal focus observations is acknowledged, but the regression results still generate statistically significant estimates. Descriptive statistics show that federal focus firms have higher revenues, SGA expense, and COGS compared to control firms. The document also mentions the results of Wilcoxon non-parametric tests, which indicate that some variables have significant differences between the control and federal focus sub-samples. Additionally, the document mentions that there is a significant difference between federal focus and control observations, which has two implications that are not further elaborated upon.