<p>This study investigates how consumer online complaints, an influential form of negative electronic word-of-mouth (eWOM), affect corporate labor cost stickiness. Using a large dataset of complaints against Chinese listed companies, we find that a higher complaint volume significantly increases labor cost stickiness. This effect is driven by two sequential mechanisms: reputation governance, through which firms are compelled to maintain workforce stability under reputational threat, and strategic rigidity, through which path-dependent investment in complaint-handling resources gradually generates structural rigidity. This relationship remains robust after a series of sensitivity tests, including alternative variable specifications, a quasi-natural experiment based on the difference-in-differences method, and the instrumental variable (IV) approach. Furthermore, the effect is more pronounced in firms with higher reputation risks and greater internal adjustment costs. Notably, although complaint-driven labor cost stickiness initially appears as a passive defensive response, it generates positive long-term performance consequences. By linking digital marketing phenomena to internal cost structures, this study reveals the substantial financial consequences of online consumer complaints and bridges marketing and management accounting research. More broadly, this study highlights the responsibility dilemma faced by firms in the digital age: under consumer complaint pressure, firms passively bear higher labor costs and lose short-term operating flexibility. Yet this response may generate positive long-term performance consequences.</p>

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Online Anger, Offline Costs: How Consumer Complaints Create Labor Cost Stickiness

  • Haowen Tian,
  • Huili Zhi,
  • Sirui Wu

摘要

This study investigates how consumer online complaints, an influential form of negative electronic word-of-mouth (eWOM), affect corporate labor cost stickiness. Using a large dataset of complaints against Chinese listed companies, we find that a higher complaint volume significantly increases labor cost stickiness. This effect is driven by two sequential mechanisms: reputation governance, through which firms are compelled to maintain workforce stability under reputational threat, and strategic rigidity, through which path-dependent investment in complaint-handling resources gradually generates structural rigidity. This relationship remains robust after a series of sensitivity tests, including alternative variable specifications, a quasi-natural experiment based on the difference-in-differences method, and the instrumental variable (IV) approach. Furthermore, the effect is more pronounced in firms with higher reputation risks and greater internal adjustment costs. Notably, although complaint-driven labor cost stickiness initially appears as a passive defensive response, it generates positive long-term performance consequences. By linking digital marketing phenomena to internal cost structures, this study reveals the substantial financial consequences of online consumer complaints and bridges marketing and management accounting research. More broadly, this study highlights the responsibility dilemma faced by firms in the digital age: under consumer complaint pressure, firms passively bear higher labor costs and lose short-term operating flexibility. Yet this response may generate positive long-term performance consequences.