Digital transformation and corporate cost stickiness: evidence from Chinese A-Share listed firms*

As digital technologies reshape corporate operations, their cost implications warrant attention. Using 28,652 firm-year observations of Chinese A-share listed firms from 2016 to 2024, this study examines how digital transformation affects cost stickiness. Results significant cost stickiness, while digital transformation alleviates it. Mechanism tests suggest that this effect operates through lower adjustment costs, reduced agency conflicts, and weaker managerial optimism. Further analysis shows that financing constraints weaken this effect, which is stronger in non-state-owned and large firms. This study contributes by integrating three mechanisms-adjustment costs, agency costs, and managerial optimism-and identifying financing constraints as a key boundary condition.