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Increase or decrease: Customer digital transformation and supplier cost stickiness

Author

Listed:
  • Li, Mengzhe
  • Guo, Siyuan
  • Wang, Xizi
  • Liu, Yingqi

Abstract

Customer digital transformation plays a crucial role in shaping supply chain management, particularly affecting the cost stickiness of supplier firms. By analyzing textual data from the top five customers of Chinese listed firms, this study investigates the impact of customer digital transformation on supplier cost stickiness. The findings demonstrate that the spillover effects of customer digital transformation substantially decrease supplier cost stickiness. This decrease is due to decreased adjustment costs, alleviated agency problems, and mitigated management optimism. Additionally, cross-sectional analysis reveals that these effects are more pronounced in suppliers with greater geographic distances from their customers, those within less competitive industries, and those audited by Non-Big Eight accounting firms. This research provides valuable insights for digital initiatives, supply chain management, and cost-related decision-making processes.

Suggested Citation

  • Li, Mengzhe & Guo, Siyuan & Wang, Xizi & Liu, Yingqi, 2024. "Increase or decrease: Customer digital transformation and supplier cost stickiness," Pacific-Basin Finance Journal, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:pacfin:v:87:y:2024:i:c:s0927538x24002592
    DOI: 10.1016/j.pacfin.2024.102507
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    More about this item

    Keywords

    Supplier cost stickiness; Customer digital transformation; Spillover effect; Supply chain;
    All these keywords.

    JEL classification:

    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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