Search Results (57)

This paper examines the effect of digital innovation on cost stickiness in manufacturing firms, focusing on the underlying mechanisms and contextual factors. Using data from Chinese A-share listed manufacturing firms from 2012 to 2023, we find that, first, for each one-unit increase in the level of digital technology, the cost stickiness index of enterprises decreases by an average of 0.4315 units, primarily through digital process innovation and digital business model innovation, whereas digital product innovation does not exhibit a statistically significant impact. Second, manufacturing servitization and the optimization of human capital structure are identified as key mediating mechanisms. Digital innovation promotes servitization by transitioning firms from product-centric to service-oriented business models, thereby reducing fixed costs and improving resource flexibility. It also optimizes human capital by increasing the proportion of high-skilled employees and reducing labor adjustment costs. Third, the effect of digital innovation on cost stickiness is found to be heterogeneous. Firms with high financing constraints benefit more from the cost-reducing effects of digital innovation due to improved resource allocation efficiency. Additionally, mid-tenure executives are more effective in leveraging digital innovation to mitigate cost stickiness, as they balance short-term performance pressures with long-term strategic investments. These findings contribute to the understanding of how digital transformation reshapes cost behavior in manufacturing and provide insights for policymakers and firms seeking to achieve sustainable development through digital innovation. Full article

This study examines the impact of cost stickiness on research and development (R&D) investment and corporate performance in Japanese firms. Additionally, it investigates the moderating effect of managerial overconfidence and financial slack. To do so, we analysed a sample of 4877 observations from Japanese firms listed on the Tokyo Stock Exchange between 2014 and 2020. The results show that cost stickiness generally promotes R&D investment while negatively affecting corporate performance. Further, although managerial overconfidence does not moderate the relationship between cost stickiness and R&D investment, it weakens the negative effect of cost stickiness on corporate performance. Meanwhile, financial slack strengthens the positive impact of cost stickiness on R&D investment, but it does not moderate the relationship between cost stickiness and corporate performance. These findings provide strategic insights into resource allocation behaviour in driving innovation and influencing corporate outcomes in the Japanese market context. Full article

Starch, as a natural, low-cost, and vegan-friendly raw material, aligns well with the growing demand for sustainable, zero-waste, and waterless cosmetic products. Its biodegradability and natural origin allow for minimal environmental impact during production and disposal. Anhydrous lotion body bars, solid and water-free alternatives to traditional moisturizers, offer high concentrations of active ingredients that are more effective and have a longer shelf life. Their solid form enables packaging in paper-based containers, reducing plastic waste. To address formulation challenges such as excessive greasiness, poor absorption, or lack of structural stability, which are often associated with the high oil content of anhydrous body lotion bars, starch may serve as a promising natural additive. The aim of this study was to optimize the formulation of an innovative starch-based anhydrous lotion bar. For this purpose, physicochemical analyses of starches from various botanical sources (corn, rice, tapioca, waxy corn and potato) were performed, along with evaluations of the functional (including commercially acceptable form, hardness sufficient for application, product stability, reduced greasiness and stickiness) and mechanical properties of the resulting bars. Additionally, the rheological behavior was described using the De Kee model. The results indicate that a 2.5% starch addition, regardless of its botanical origin, provides the best balance between viscosity and ease of application. Moreover, starches with a low moisture content and high oil absorption capacity effectively reduce the greasy skin sensation. These findings demonstrate the potential of starch as a natural multifunctional additive in the development of stable, user-friendly anhydrous lotion body bars. Full article

In the modern corporation, understanding sustainable cost management practices is essential for promoting economic resilience and resource efficiency. This study investigates how ownership structures influence the behavior of selling, and general and administrative (SG&A) costs during periods of sales fluctuations in South Korean firms, with particular attention to Chaebols. Drawing upon agency theory and corporate governance perspectives, we examine whether proxies for agency costs, namely, free cash flow, asset utilization ratios, and operating expense ratios, explain variations in SG&A cost responses to changes in revenue. Utilizing a panel dataset of 4279 firm-year observations from KOSPI-listed companies over the period 2011–2021, we employ Pooled Ordinary Least Squares (OLS), Fixed Effects, Random Effects, and Generalized Method of Moments (GMM) estimations to model SG&A cost behavior. The analysis incorporates regression-based interaction terms that capture asymmetric cost adjustments during sales declines, commonly referred to as cost stickiness. Our findings indicate that firms with concentrated ownership, such as Chaebols, exhibit significantly lower SG&A cost stickiness, reflecting stronger financial discipline and more efficient resource allocation. In contrast, firms with dispersed ownership demonstrate more pronounced cost stickiness, consistent with governance frictions and managerial discretion. These results emphasize the moderating role of ownership structure in cost behavior and highlight its implications for sustainable corporate governance. Our study contributes to the literature on cost management and financial sustainability by offering empirical insights from a distinctive institutional setting. Policy recommendations include enhancing internal controls, promoting transparent cost practices, and encouraging shareholder oversight to reinforce long-term efficiency. Full article

This study investigates whether government subsidies promote R&D cost stickiness in the new energy vehicle (NEV) industry in China—that is, whether public funding encourages firms to retain R&D resources even during periods of declining sales. While prior literature primarily explores the relationship between subsidies and R&D investment levels, it often overlooks firms’ financial position and dynamic cost behaviors. Given that R&D investment has high adjustment costs and is sensitive to cash flows, reductions in R&D spending during downturns may reflect managerial cost asymmetry rather than a crowding-out effect of subsidies. Moreover, government subsidies may serve as a signal of long-term market optimism, motivating managers to retain R&D resources during economic downturns. Using a panel dataset of 573 listed new energy vehicle (NEV) firms in China’s A-share market from 2007 to 2021, we construct a model based on the asymmetric cost behavior framework to empirically assess the impact of government subsidies on R&D cost stickiness. The results show that government subsidies significantly increase the degree of R&D cost stickiness. Serving as a signal of future market optimism, subsidies raise managerial expectations and incentivize decisions to retain R&D-related costs during economic downturns. This positive relationship is more pronounced in firms with high levels of green innovation, large-scale enterprises, and non-state-owned firms. These findings suggest that public funding alleviates managerial pressure to cut R&D expenses amid revenue declines, thereby supporting firms’ long-term innovation strategies. Our study contributes to the cost management literature by highlighting a novel channel through which subsidies influence managerial discretion under uncertainty. It also provides policy implications for the future phase-out of subsidies, emphasizing the need for complementary market mechanisms to sustain innovation investment, particularly for small, young, and financially constrained firms. Full article

Facing a society that has accumulated many ecological and environmental problems, green technology innovation has gradually become an effective way to test the efficiency of environmental policies. This study investigated the impact of environmental policy intensity on green technological innovation within manufacturing enterprises listed in Shanghai and Shenzhen A-shares from 2010 to 2021. This research delved into the micro-level effects of such policies by utilizing data from various levels, including provinces, regions, enterprises, and years, along with a tailored environmental protection dictionary derived from government reports. It introduced the notion of cost stickiness to assess the relationship between regulatory stringency and innovation in the manufacturing sector. This study identified a specific regulatory intensity range within which environmental policies encourage green innovation, highlighting the importance of balanced regulation. This nuanced analysis contributes to a deeper understanding of the interplay between environmental regulation and technological innovation in manufacturing. Full article

Driven by the dual imperatives of global economic green transformation and the advancement of digital technologies, achieving synergistic enhancement through digitalization and greenization to promote sustainable development has become a focal point for both academia and practical fields. This study, utilizing a sample of Chinese A-share listed companies from 2010 to 2023, aims to explore the transformative potential of digital–green synergy (DGS) for enhancing enterprise sustainable development within the realm of production efficiency improvement. Employing a coupling coordination model based on the entropy-weighted TOPSIS method, the research measures the DGS levels of enterprises. Grounded in strategic synergy theory, the resource-based view, and dynamic capability theory, this study thoroughly investigates the direct impacts of DGS on corporate TFP, intermediary mechanisms, moderating effects, and heterogeneous roles. The research findings robustly demonstrate that DGS can significantly improve enterprise TFP through optimizing resource allocation, reducing cost stickiness, and enhancing operational efficiency, thereby facilitating the dynamic reorganization of production factors and the creation of sustainable value. Furthermore, external factors, such as financing constraints and environmental regulation, alongside internal organizational factors like executive characteristics, are shown to exert significant moderating effects on the effectiveness of DGS. In summary, this research not only highlights the crucial role of DGS in enhancing production efficiency as a driver for high-quality corporate development and the pursuit of sustainable goals but also provides important theoretical guidance for policymakers to incentivize digital and green transformation. It also offers practical insights for enterprise managers to strategically formulate synergistic development strategies, enhance economic benefits, and achieve long-term sustainable performance. Beyond these practical implications, this study further enriches the theoretical landscape by first extending strategic synergy theory to firm-level digital–green synergy in emerging markets; second by enhancing sustainability research by adopting a broader “environment-society” framework; methodologically innovating by developing a novel “goal-strategy-input-technology” synergy measurement framework; and finally, deepening the theoretical understanding of DGS-TFP relationships through mechanism and moderator exploration. Full article

At present, China’s manufacturing industry is urgently in need of a transition, as well as an upgrade from low- to high-end production. Concurrently, as digital technology continues to advance, the enterprise-level digital transformation is anticipated to emerge as a new “engine” driving technological innovation. This study is centered on China’s A-share listed manufacturing enterprises, as we aim to explore the impact of digital transformation on technological innovation. Employing a fixed-effect model, the instrumental variable method, and propensity score matching, combined with a difference-in-differences approach, threshold regression, and a quantile regression model, we empirically examine the influence of digital transformation on technological innovation within the manufacturing sector. Our findings reveal the following: (1) Digital transformation enhances technological innovation. (2) Mediation analysis indicates that digital transformation boosts technological innovation by mitigating cost stickiness. (3) The heterogeneity analysis shows that the effect of digital transformation on technological innovation is more pronounced in larger enterprises, particularly those with lower technological intensity, lower asset intensity, and stronger innovation capabilities. The outcome of this study provides a decision-making reference for governments and enterprises, whereby the government can formulate industrial and fiscal policies, as well as helping enterprises to carry out digital transformation through policy guidance and support. Enterprises can formulate differentiated transformation strategies based on their own characteristics, optimize their cost structure through digital transformation, release resources for technological innovation, and improve their own technological innovation capabilities. Full article

This paper examines the issue cost-effective procurement of a commodity product when its spot (open) market prices are stochastic, contract prices are previously determined, and there are costs associated with adjusting (i.e., switching) the procurement quantities from an alternative. Spot (open) market and contract as sole modes of procurement could present risks of high magnitude and uncertainty of expenses for the buyer. To address these risks, a risk-averse buyer may consider simultaneous use of both alternatives with adjustment of the purchase quantities from both the alternatives over time. Scenarios when the switching costs depend on the relative prices of the two alternatives are considered. The problem being analytically intractable, a mixed method decision model combining analytical and computational techniques to analyze the problem is proposed. The model helps identify expected optimal contract and spot market procurement quantities with respect to unknown spot prices and known contract prices over the planned procurement horizon when procurement quantity adjustment costs are influenced by the spends. The analysis reveals that it is cost-effective to continue purchasing with an existing pattern of procurement from the two alternatives until the contract to spot market price ratio reaches a threshold level and then to change the proportion of quantity purchased from the two alternatives. Using numerical analysis, we illustrate the theoretical and managerial significance of this stickiness to continue with an existing pattern until an adjustment. Full article

The current study investigates the relationship between the CEO’s power, the workforce’s productivity, and the company’s value in Iraqi stock exchange companies. A sample of 34 companies listed on the Iraqi Stock Exchange from 2016 to 2021 was tested using a multiple regression model, a panel data approach, and a fixed effects model. CEO power is measured by the busing factor analysis approach, which integrates four indices: CEO salary, CEO ownership, CEO tenure, and CEO control over board members. The findings indicate a positive and significant relationship between CEO power and labor productivity. Also, there is a negative and significant relationship between CEO power and the stickiness of labor costs. On the other hand, we found a positive and significant relationship between the CEO power and firm value. In addition, labor cost stickiness has a positive effect on firm value. By highlighting the CEOs’ power, this research tries to increase companies’ attention to this issue and its effect on improving employment productivity, cost management, and firm value. Full article

Purpose: This study investigates the relationship between product diversification strategy and cost stickiness, focusing on managerial overconfidence as a moderating factor. It aims to address a critical gap in the literature by providing empirical insights grounded in the Resource-Based View (RBV) theory, specifically examining firms listed on the Tehran Stock Exchange. Methodology: Utilizing a sample of 149 companies from the Tehran Stock Exchange in Iran spanning from 2015 to 2021, this study tests two hypotheses: (1) a positive relationship between product diversification and cost stickiness and (2) the amplification of this relationship by managerial overconfidence. Product diversification is quantified using the Herfindahl Index, while managerial overconfidence is measured through an investment-based index derived from capital expenditures. Cost stickiness is assessed by analysing the asymmetric behaviour of costs in response to changes in sales, focusing on how costs tend to remain high even when sales decrease. Findings: The empirical results substantiate both hypotheses, demonstrating a significant positive relationship between product diversification strategy and cost stickiness. Furthermore, managerial overconfidence amplifies this relationship, highlighting the role of internal resources and managerial perceptions in shaping cost behaviour. Originality: This study contributes substantially to the literature by being among the first to empirically examine the interplay between product diversification strategy, cost stickiness, and managerial overconfidence. Extending the RBV theory to cost behaviour and strategic management provides novel insights for scholars and practitioners in entrepreneurship, corporate strategy, and organizational behaviour. The findings underscore the importance of strategic choices and managerial traits in determining cost stickiness, offering valuable implications for financial analysts, auditors, and stakeholders. Full article

Since 2014, China has been actively promoting the transformation of manufacturing servitization, clarifying the importance of manufacturing servitization. This paper investigates the correlation between manufacturing servitization and cost stickiness, supplementing the research on the economic consequences of manufacturing servitization and the influencing factors of cost stickiness. This paper launches an empirical study with a sample of A-share manufacturing companies from 2014 to 2022. The research results show that, first, manufacturing servitization can inhibit enterprise cost stickiness; second, manufacturing servitization affects enterprise cost stickiness through the path of reducing enterprise adjustment costs, reducing managers’ optimistic expectations and reducing enterprise agency costs; third, the negative relationship between manufacturing servitization and cost stickiness is stronger among firms with a low level of internal control, a strong degree of financing constraints, a good quality internal information environment, a strong degree of competition in the market, and firms that are in capital-intensive manufacturing industries; fourth, the role of embedded servitization on enterprise cost stickiness is not significant, while hybrid servitization can have a significant negative effect on enterprise cost stickiness; and fifth, the impact of manufacturing servitization on enterprise cost stickiness mainly lies in the cost of material resources rather than the cost of human resources. Full article

Objectives: Investigating if the proportion of fixed assets over total assets is positively associated with the asymmetric cost behavior of public and private hospitals in Brazil. Methods: In order to test the sticky cost phenomenon in a different sector of companies and industries, we used panel data regression to investigate the asymmetric cost behavior in Brazilian hospitals, analyzing the hospital cost behavior regarding the variation in revenues and verifying whether the proportion of fixed assets over total assets is positively associated with the asymmetric cost behavior. As a result, this research took the findings obtained by the models applied to data from the 101 hospitals comprising the sample, spread over the 2010–2019 period. The research was divided into four sections. The first section tested asymmetry for fixed assets over total assets for hospitals in general. The second section divided the sample into public and private hospitals. The third section analyzed the sample of conglomerates against a single hospital. Finally, the fourth section tested the asymmetry of the hospitals in the sample measured by the number of beds. Results: The evidence documented here partially confirms the results of literature on the existence of asymmetric cost behavior regarding variations in revenue. The H₁ hypothesis that the proportion of fixed assets over total assets is positively associated with the asymmetric cost behavior was confirmed, especially for private and small hospitals regarding fixed assets. Full article

The study assessed the trapping efficacy of locally modified (1) Gravid Aedes Trap (GAT) lined with insecticide-treated net (ITN) as a killing agent and (2) Autocidal Gravid Ovitrap (AGO) with sticky board in the semi-field system (SFS) and field setting. Fully balanced Latin square experiments were conducted to compare GAT lined with ITN vs. AGO, both with either yeast or grass infusion. Biogent-Sentinel (BGS) with BG-Lure and no CO₂ was used as a standard trap for Aedes mosquitoes. In the SFS, GAT outperformed AGO in collecting both nulliparous (65% vs. 49%, OR = 2.22, [95% CI: 1.89–2.60], p < 0.001) and gravid mosquitoes (73% vs. 64%, OR = 1.67, [95% CI: 1.41–1.97], p < 0.001). Similar differences were observed in the field. Yeast and grass infusion did not significantly differ in trapping gravid mosquitoes (OR = 0.91, [95% CI: 0.77–1.07], p = 0.250). The use of ITN improved mosquito recapture from 11% to 70% in the SFS. The same trend was observed in the field. Yeast was chosen for further evaluation in the optimized GAT due to its convenience and bifenthrin net for its resistance management properties. Mosquito density was collected when using 4× GATs relative to BGS-captured gravid mosquitoes 64 vs. 58 (IRR = 0.82, [95% CI: 0.35–1.95], p = 0.658) and showed no density dependence. Deployment of multiple yeast-baited GAT lined with bifenthrin net is cost-effective (single GAT < $8) compared to other traps such as BGS ($160). Full article

Numerous researchers acknowledge that the occupational pension protects employees. However, in China, the total cost of occupational pensions is shared between employees and employers, representing a significant financial commitment. This study aimed to explore the effect of the occupational pension on corporate social responsibility (CSR) and organizational resilience. Drawing on insights from cost-stickiness and resource-based theories, we developed a model that elucidated the influence of occupational pensions on firms’ approaches to CSR within the context of COVID-19 and how this, in turn, impacted organizational resilience. This study categorized CSR into strategic and responsive activities, employing the concept of cost stickiness as a framework. We analyzed a sample of 34,145 observations from Chinese A-share listed companies spanning the period 2010–2023 to examine the influence of occupational pension adjustments on CSR strategies. The findings of this study revealed that the cost pressure associated with contributions to occupational pensions prompted firms to decrease their engagement in responsive CSR activities while enhancing their strategic CSR initiatives. Furthermore, it was observed that strategic CSR contributed to improved organizational resilience, whereas responsive CSR did not exhibit the same effect. The relationship between occupational pension contributions and CSR was found to be significantly and negatively moderated by factors such as the minimum wage and population aging. Conversely, the relationship between CSR and organizational resilience was significantly and positively moderated by digital transformation and marketing capabilities. Full article