The high-quality development of China’s economy relies on the effective resolution of excess production capacity and the continuous improvement of resource allocation efficiency. As a key component of China’s bankruptcy legal system, the bankruptcy adjudication system plays a vital role in fostering healthy competition among firms, achieving efficient resource allocation, and building a high-quality supply system. This study based on a quasi-natural experiment of the phased regional pilot establishment of liquidation and bankruptcy courts across China, scientifically examines the potential impact and mechanisms of bankruptcy adjudication reform on resource allocation efficiency from the perspective of corporate cost stickiness. Using a multi-period difference-in-differences model, this study finds that the establishment of liquidation and bankruptcy tribunal significantly alleviated the cost stickiness of local firms. This suggests that the bankruptcy trial reform improves the quality and efficiency of bankruptcy proceedings, which in turn enhances the resource allocation efficiency, as evidenced by the reduction in cost stickiness. The mechanism test reveals that the bankruptcy adjudication reform enhances resource allocation efficiency primarily by curbing local government administrative intervention and encouraging enterprises to engage in market-based transactions. Furthermore, the heterogeneity analysis shows that the positive effect of bankruptcy trial reform on resource allocation efficiency is more pronounced among state-owned enterprises and zombie enterprises, as well as in firms located in regions with higher levels of legal institutionalization. In addition, the increase in bankruptcy trial reform further reduces the cost stickiness of local firms, and mainly reduces production cost stickiness rather than operating cost stickiness. Finally, this paper finds that the alleviation of the cost stickiness problem brought about by bankruptcy trial reforms is able to improve firms’ profitability and return on investment, bringing positive economic benefits to firms. In conclusion, this study unveils the mechanism through which bankruptcy adjudication reform influences the allocation of production factors at the microenterprise level, and provides timely empirical evidence and policy insights to support the deepening of supply-side structural reforms.