The Impact of Cost Leadership Strategy on the Development of High-Quality Businesses

Abstract

Based on the 2015-2021 Chinese A-share listing data, this paper empirically investigates the impact of cost leadership strategy on the level of high-quality development of enterprises and its mechanism of action, in combination with the cost leadership strategy index at the enterprise level. Cost leadership strategy is found to have a significant positive impact on the level of high quality business development, and this finding still holds after robustness testing using multiple methods. Mechanistic analyses show that funding constraints negatively moderate the relationship between cost leadership strategy on firms' level of high quality development. In contrast, firms' growth positively moderates the relationship between cost leadership strategy on the firms' high-quality development level. As per heterogeneity analysis, high-tech companies that frequently use big data technology, high-tech companies, and companies with a moderate percentage of management shareholding all see an increase in their firms' high-quality development levels as a result of the cost leadership strategy. The research in this paper is instructive for how better enterprises can promote the adoption of cost leadership strategy for the high-quality development of enterprises.