Regional cultural diversity and corporate cost stickiness: evidence from Chinese dialects

This paper uses Chinese A-share listed firms on the Shanghai and Shenzhen stock exchanges from 2007 to 2024 as the research sample to investigate the effect of regional cultural diversity on corporate cost stickiness. The findings show that regional cultural diversity heightens cost stickiness, as validated by extensive robustness tests. Mechanism analysis reveals that cultural diversity amplifies cost stickiness by increasing adjustment costs, fostering managerial optimism, and raising agency costs. Moderation analysis demonstrates that digital transformation, social trust, and appointing local CEOs alleviate the detrimental impact of cultural diversity on cost stickiness. These results clarify the role of regional culture in shaping firm behavior, advance research on cultural diversity and cost stickiness, and offer practical recommendations for enhancing corporate cost management.