This study aims to investigate the relationship between environmental uncertainty and asymmetric cost behavior, focusing on 96 Brazilian non-financial listed firms in the period 2018–2022.
The analysis employs descriptive statistics, a correlation matrix and quantile regression. Asymmetric cost behavior was analyzed based on the cost of goods sold and selling, general and administrative expenses accounts. Environmental uncertainty comprises a framework that classifies firms as being on alert when they simultaneously implement abnormal reductions in capital investments, number of employees and discretionary expenses.
The results reveal significant anti-sticky behavior in selling, general and administrative costs among firms in the upper quantiles, indicating that firms with higher cost structures tend to implement more substantial cost reductions during revenue declines. In contrast, no significant asymmetry was observed for cost of goods sold. These findings suggest that environmental uncertainty influences managerial cost decisions differently across cost categories, particularly those with greater discretionary flexibility.
This study contributes by incorporating environmental uncertainty as a determinant of asymmetric cost behavior. It also shows how this relationship varies across firms with different cost structures, offering practical implications for decision-makers operating in volatile environments.
