Explanation of asymmetric cost behavior based on the synchronization of political and business cycles

In response to sales changes, managers do not change the firm's resources symmetrically. The asymmetry in responses causes sticky or anti-sticky cost behavior. Some reason have been documented for asymmetric cost behavior in previous studies, one of which is deliberate managerial decisions hypothesis. Theoretically, the manager’s optimism or pessimism about future sales may delay the adjustment of resources. The combination of different modes of political cycles (election) and business cycles (expansion and recession) can create different expectations about future sales and lead to asymmetric cost behavior. There is no empirical evidence in this regard. Therefore, the purpose of the present study is to investigate the effect of political cycles and business cycles on asymmetric costs behavior. For this purpose, the required data for 108 companies for the period 1380 to 1394 has been collected and tested. The Findings show that cost behavior is different in various combinations of business cycle and political cycle. in other words, managers' decisions about the resources adjustment are influenced by the economic and political conditions.