Business

Enterprise digital transformation, managerial myopia and cost stickiness

Y. Li, P. Feng, et al.

Discover how enterprise digital transformation impacts cost stickiness and managerial myopia in Chinese-listed enterprises, as revealed by the research conducted by Yu Li, Panpan Feng, Tiange Qi, Jiale Yan, and Yongjian Huang. This investigation uncovers the factors that inhibit costs and the nuances of managerial decisions, providing crucial insights for businesses navigating the digital economy.... show more

Abstract

Using Chinese-listed enterprise data from 2010 to 2021, we study the relationships among enterprise digital transformation, managerial myopia and cost stickiness. The results show that enterprise digital transformation inhibits cost stickiness, including operating cost stickiness as well as selling, general and administrative (SG&A) cost stickiness. This result holds after various robustness and endogeneity tests. Additionally, mechanism research indicates that enterprise digital transformation inhibits cost stickiness by reducing adjustment costs (ACs) and alleviating financing constraints (SAs). However, managerial myopia negatively affects the inhibition of enterprise digital transformation on cost stickiness by increasing ACs and aggravating SAs. Furthermore, the relationship between enterprise digital transformation and cost stickiness is stronger for mature, state-owned and high-tech enterprises and is more pronounced where the digital economy policy environment is better.

Publisher

Humanities and Social Sciences Communications

Published On

Oct 19, 2024

Authors

Yu Li, Panpan Feng, Tiange Qi, Jiale Yan, Yongjian Huang

DOI

https://doi.org/10.1057/s41599-024-03926-1

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