The Effect of Competitive Factors on Asymmetric Cost Behavior

Cost management and resource consumption planning are among issues to deal with in management in order to create value for the agency under our direction. Yet, this subject requires full awareness of cost behavior and effective factors on that. Former studies about asymmetric cost behavior mostly focused on internal factors while the managers consider both internal and external factors simultaneously when they want to make strategic decisions about costs. Therefore, in order to focus on external factors, this research studies the impact of competitive factors on asymmetric cost behavior in the companies accepted in Tehran Stock Exchange. The present study has a practical purpose and it is correlational in terms of method or nature. In order to achieve the research objectives, the data of financial statements of 167 corporations during 2010 to 2019 were explored. For hypothesis testing, multivariate regression with mixed data was used. The results of research hypothesis testing indicate that competitive factors such as product differentiation, input cost, and market size do not have a significant impact on asymmetric behavior of selling, administrative and public costs. Active corporations in competitive industries have less control over product costs and may decrease the costs to maintain definite profitability and or minimize loss. Furthermore, active corporations in industries with high input cost have less tendency to invest on committed sources such as advertisement, research and development as well as selling, administrative, and public costs to avoid the entrance of potential competitors to this market and their achievement of long-term exclusive power. As a result, the managers of these corporations may decrease these costs when they have less selling.