Digital Economy Governance and Corporate Cost Stickiness: Evidence from China

This study exploits the promulgation of China’s E-commerce Law in 2009 as a quasi-natural experiment to construct a difference-in-differences (DID) model, examining the impact and mechanisms of digital economy governance on corporate cost stickiness. Using Chinese-listed manufacturing companies from 2013 to 2020 as research samples, we find that the implementation of the E-commerce Law significantly reduces corporate cost stickiness. Mechanism analysis reveals that the implementation of the E-Commerce Law promotes digital transformation in traditional manufacturing firms and strengthens their supply chain collaboration. These advancements lead to more efficient cost management decisions and reduce corporate cost stickiness. Heterogeneity analysis indicates that this effect is more significant for mature and declining enterprises and state-owned enterprises, as well as in regions with relatively developed economies and low reliance on foreign trade. Further research shows that the implementation of the E-Commerce Law curbs managerial opportunism and enhances managerial ability.