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Digital transformation and firm cost stickiness: Evidence from China

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  • Chen, Yufeng
  • Xu, Jing

Abstract

Digital transformation has increasingly become an important determinant in business decision-making. Using the data of Chinese listed companies from 2011 to 2020, this paper investigates the impact of digital transformation on cost stickiness. The empirical results demonstrate that digital transformation can significantly inhibit cost stickiness by reducing adjustment cost and management optimistic expectation, and the inhibiting effect is persistent. Moreover, digital transformation has a more significant inhibiting effect on the non-state-owned firm and the material resource cost stickiness. This paper provides a new perspective for cost reduction promotes the deep integration of digital and real economies.

Suggested Citation

  • Chen, Yufeng & Xu, Jing, 2023. "Digital transformation and firm cost stickiness: Evidence from China," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322006869
    DOI: 10.1016/j.frl.2022.103510
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    References listed on IDEAS

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