Increase or decrease: Customer digital transformation and supplier cost stickiness

Mengzhe Li, Siyuan Guo, Xizi Wang and Yingqi Liu

Pacific-Basin Finance Journal, 2024, vol. 87, issue C

Abstract: Customer digital transformation plays a crucial role in shaping supply chain management, particularly affecting the cost stickiness of supplier firms. By analyzing textual data from the top five customers of Chinese listed firms, this study investigates the impact of customer digital transformation on supplier cost stickiness. The findings demonstrate that the spillover effects of customer digital transformation substantially decrease supplier cost stickiness. This decrease is due to decreased adjustment costs, alleviated agency problems, and mitigated management optimism. Additionally, cross-sectional analysis reveals that these effects are more pronounced in suppliers with greater geographic distances from their customers, those within less competitive industries, and those audited by Non-Big Eight accounting firms. This research provides valuable insights for digital initiatives, supply chain management, and cost-related decision-making processes.

Keywords: Supplier cost stickiness; Customer digital transformation; Spillover effect; Supply chain (search for similar items in EconPapers)
JEL-codes: M20 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:87:y:2024:i:c:s0927538x24002592

DOI: 10.1016/j.pacfin.2024.102507

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