The Impact of Enterprise Innovation Investment on Labor Cost Stickiness—Evidence from Listed Manufacturing Companies

Abstract

In recent years, China’s manufacturing industry has been in a critical period of transition towards “innovation-driven,” and enterprises generally face the dual challenges of rising labor costs and the urgent need to increase innovation investment. This paper aims to deeply explore how innovation investment affects enterprise labor cost stickiness. In terms of research methodology, this paper selects the financial data of China’s A-share listed manufacturing enterprises from 2021 to 2025 as the research sample, and draws on the ABJ model to construct a fixed-effects regression model containing an interaction term between innovation investment and changes in operating revenue. The empirical research results show that there is indeed a significant phenomenon of labor cost stickiness in the sample manufacturing enterprises, and confirm that the greater the innovation investment, the higher the labor cost stickiness of manufacturing enterprises. The conclusion shows that with the increase of innovation investment, enterprises’ dependence on core technical personnel with high asset specificity deepens. In order to avoid high adjustment costs and prevent the risk of technology leakage, enterprises are often reluctant to lay off employees easily when performance declines, thereby exacerbating the downward rigidity of labor costs.