Paper shield: ".........cancel the EFFECT of a event card.........."

To be a dragon: ".........stand a character TO put a character into play from dead pile....."

My question is: if Paper shield just cancel the EFFECT of and event card, then I think I should stand the character. Coz it is only the cost paid to trigger effect thereafter.

Am I correct?

That's correct, playing Paper Shield on To Be a Dragon prevents the character from returning from the dead pile, but the cost (standing a character) remains paid.