Can the level of data elements utilization in enterprises mitigate cost stickiness? Evidence from China

Data elements are now widely embedded throughout the entire lifecycle of enterprise production and operations, presenting an opportunity window for cost control. This paper constructs a research dataset comprising firms traded on China’s two main capital markets over the decade spanning 2014 to 2023. Leveraging this sample, it empirically examines the impact of enterprise data elements utilization on cost stickiness and its transmission channels. Empirical results indicate that enhancing the utilization level of corporate data elements can mitigate cost stickiness. The mechanism test finds that data elements reduce cost stickiness by improving operational efficiency and optimizing corporate governance. The former is represented by a reduction in the deviation between supply and demand and an increase in the speed of asset turnover. The latter reflects the alleviation of managers’ myopia and the improvement of internal control quality. This paper enriches the literature on the determinants of cost stickiness while offering datadriven insights that enable firms to improve cost efficiency through the use of data elements.