Title: How does asymmetric cost behaviour change in digital transformation?

Authors: Peiyan Zhou; Shuya Zhou; Hannah Ji; Jonah Ji; Xiaolan Xiao

Addresses: School of Business and Management, Jilin University, 2699 Qianjin Street, Changchun, Jilin, China ' School of Business and Management, Jilin University, 2699 Qianjin Street, Changchun, Jilin, China ' Ernst & Young LLP, 200 Clarendon Street, Boston, MA 02116, USA ' Johns Hopkins Carey Business School, 1625 Massachusetts Avenue NW, Washington, DC 20036, USA ' School of Accounting, Guangzhou College of Technology and Business, No. 166, Sanhua Road, Leping Town, Sanshui District, Foshan City, Guangdong, China

Abstract: Rapid development of highly sophisticated digital technology such as mobile technology has brought an unprecedented impact on corporate governance. Drawing on organisational information processing theory, we hypothesise that digital transformation affects cost behaviour. Through empirical analysis, we confirm that: a) digital transformation significantly reduces both cost stickiness and cost anti-stickiness; b) reducing resource adjustment costs and managerial opportunism serve as the intermediary factors linking digital transformation to cost stickiness and anti-stickiness. Additionally, digital transformation can help mitigate cost anti-stickiness by diminishing managerial pessimism; c) the influence of digital transformation in reducing asymmetric cost behaviour is particularly noticeable among companies operating in highly competitive industries and exhibiting a strong entrepreneurial orientation; d) cost asymmetry hampers corporate innovation, and digital transformation can bolster corporate innovation performance by mitigating cost asymmetry. Our findings underscore the significance of transitioning to digitalisation on business management decision making and offer valuable guidance for implementing digital transformation strategies.

Keywords: cost asymmetry; digital transformation; adjustment costs; managerial expectations; managerial opportunism; innovation performance; mobile technology.

DOI: 10.1504/IJMC.2026.154637

International Journal of Mobile Communications, 2026 Vol.28 No.1, pp.43 - 86

Received: 06 May 2025
Accepted: 10 Oct 2025
Published online: 08 Jul 2026 *

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