Digital Transformation And Cost Stickiness

As China’s economy enters a new stage of high-quality development,supply-side structural reform has become a key measure to achieve high-quality economic development.As an important part of the five major tasks,cost reduction still needs to be continuously promoted,and the existence of cost stickiness in the process of cost reduction has increased the difficulty of enterprise cost management.At the same time,the increasingly fierce market competition and the long-term impact of the COVID-19 have made the business development of enterprises face enormous uncertainty.All costs are rising,and the profit space is further compressed.Enterprises urgently need to improve cost management to get out of business difficulties.Reducing cost stickiness will play an important role in optimizing the cost structure,improving business management,and improving operational efficiency of enterprises.Therefore,theoretically analyzing the influencing factors of cost stickiness and reducing resource consumption have important practical significance for achieving high-quality transformation and development of enterprises.In practice,enterprises are also seeking various business strategic changes to improve cost management,reduce cost stickiness,and improve market competitiveness.In recent years,the digital economy with ABCD as the underlying logic has led the wave of the fourth industrial revolution.The digital economy has occupied a new strategic highland of the fourth generation of industrial revolution.Countries have successively introduced strategic policies to promote the development of the digital economy,in order to gain an advantage in this economic competition.The Chinese government also attaches great importance to the development of the digital economy and elevates it to the height of national strategy.Accelerating the construction of digital China and promoting the deep integration of the digital economy and the real economy is an important way to achieve high-quality economic development.As a major participant in the market economy,enterprises are important players in promoting the development of the digital economy.The "14th Five Year Plan" for the Development of the Digital Economy clearly proposes to guide enterprises to strengthen their digital thinking and accelerate their digital transformation and upgrading.The implementation of enterprise digitalization strategy will completely change traditional operations and business models,and have a profound and lasting impact on the production,processing and operation management of enterprises.In this context,it is of great practical significance to study how digital transformation can change the production and operation of micro enterprises.From the perspective of the current economic consequences of digital transformation for enterprises,existing research has focused more on the impact of digital transformation on business performance,research and innovation,and less on the impact of enterprise cost management decisions,with few systematic and complete studies.Considering the direct impact of digital transformation on the production and operation of micro enterprises,this article attempts to study the relationship between digital transformation and enterprise cost stickiness.Specifically,this article conducts research from the perspectives of dynamic capability theory,information asymmetry theory,and principal-agent theory.It is expected that enterprises through digital transformation can utilize dynamic capabilities to rationally allocate resources,achieve business process reengineering,improve internal control,and improve information asymmetry among various departments,as well as within and outside the enterprise,thereby alleviating agency issues and reducing enterprise cost stickiness.Based on the transformation stage of China’s economy from high-speed development to high-quality development,this article uses operational and financial data of listed companies in Shanghai and Shenzhen stock markets from 2012 to 2021,and conducts empirical analysis through selection of indicators and regression testing.The research results show that:(1)There is a widespread phenomenon of cost stickiness in Chinese enterprises,and digital transformation can reduce cost stickiness;(2)The heterogeneity test shows that the digital transformation of enterprises significantly reduces the cost stickiness of non-state-owned enterprises,highly competitive enterprises,high-tech enterprises and enterprises in decline period,but has no significant impact on the cost stickiness of state-owned enterprises,enterprises with weak market competition and enterprises in growth or mature period;(3)Mechanism testing found that digital transformation mainly reduces cost stickiness by adjusting cost paths and agency problem paths.Managers’ optimistic expectations have no significant impact on the cost stickiness of digital transformation enterprises.Mitigating agency issues is an important path for digital transformation to reduce enterprise cost stickiness.This article is expected to make the following contributions:First,it enriches relevant research on the economic consequences of digital transformation,filling the gaps in existing research.The existing literature mainly focuses on the perspectives of enterprise R&D innovation and enterprise value,while research on specific operating cost management for micro enterprises is relatively scarce.This article focuses on the relationship between enterprise digital transformation and enterprise cost stickiness,providing new insights into further understanding enterprise strategic transformation and cost management.Secondly,previous studies on enterprise cost stickiness have mostly focused on the economic level,lacking a discussion from the perspective of enterprise overall strategic transformation.This article incorporates enterprise digital transformation into the research framework,enriching research in the field of cost stickiness.Thirdly,the research content of this article has certain practical significance for enterprises and governments.It can provide effective guidance for current enterprises to address the uncertainty of the internal and external environment,accelerate the promotion of digital transformation,reduce resource consumption,improve quality and efficiency,and achieve high-quality development.It can also provide some reference for the government to deepen supply-side structural reform,accelerate the construction of digital China,and achieve high-quality economic development.