Influence of COVID-19 on asymmetric cost behavior and intellectual capital efficiency: a comparison of Australian and Chinese listed firms

Abstract

ABSTRACT This study examines whether intellectual capital efficiency affects the asymmetric cost behavior of managers and whether such influences were impacted by the COVID-19 pandemic in Australia and China. The sample consists of Australian and Chinese-listed firms from 2018 to 2021. The results found that intellectual capital efficiency increases the cost stickiness in general for both countries. However, the degree of cost stickiness caused by intellectual capital efficiency is significantly more pronounced in Australia than in China. When Chinese firms have government connections, the degree of cost stickiness caused by the intellectual capital efficiency increases and the significant difference in cost stickiness between China and Australia ceases. In addition, this study found that COVID-19 affected the degree of cost stickiness in China more profoundly than in Australia. This study presents important implications for external stakeholders to assess a firm’s cost behavior by considering a firm’s intellectual capital efficiency as the determinant of asymmetric cost behavior.