TY - JOUR
T1 - Digital transformation along the supply chain
AU - Guo, Chenhao
AU - Ke, Yun
AU - Zhang, Jinkang
N1 - Funding Information:
We thank Shuo Li, Xiaoli Feng, Nan Yang, two anonymous reviewers, and seminar participants at the 2023 Chinese Corporate Finance and Capital Market Conference (FCFCMD), the University of Western Australia, and the Soochow University for their comments and suggestions. We appreciate the support by the Research Funds of National Social Science Foundation of China (No. 22BGL074 ). We also acknowledge the Scholarships for International Research Fees provided jointly by Soochow University and University of Western Australia (UWA-SUDA SIRF). All errors and omissions are our own.
Funding Information:
We thank Shuo Li, Xiaoli Feng, Nan Yang, two anonymous reviewers, and seminar participants at the 2023 Chinese Corporate Finance and Capital Market Conference (FCFCMD), the University of Western Australia, and the Soochow University for their comments and suggestions. We appreciate the support by the Research Funds of National Social Science Foundation of China (No.22BGL074). We also acknowledge the Scholarships for International Research Fees provided jointly by Soochow University and University of Western Australia (UWA-SUDA SIRF). All errors and omissions are our own.
Publisher Copyright:
© 2023 Elsevier B.V.
PY - 2023/9
Y1 - 2023/9
N2 - In the last two decades, digital transformation has been critical for firms' survival and development. Thus, it is important to understand what factors might help facilitate firms' digital transformation. We investigate this problem in the supply chain context by examining whether and how a supplier's major customers influence its digital transformation. Using a sample of Chinese public firms from 2007 to 2020, we document that major customers' level of digital transformation is positively associated with their supplier's level of digital transformation, and the effect is more pronounced when customers are of greater importance to suppliers. The finding holds to a battery of robustness tests. Cross-sectional tests reveal that the impact of customers' digital transformation on suppliers' digital transformation is stronger for suppliers with technology-experienced executives, more high-skilled labor, fewer financial constraints, and narrower digital gap. Moreover, suppliers headquartered in regions with more digital infrastructure also show a more pronounced effect. Further analyses show that the underlying channels through which customers impact their supplier's digital transformation are knowledge transfer and market competition. Finally, we show that suppliers' digital transformation helps increase innovation outcomes. Overall, our paper extends prior literature on the real effects of customer-supplier relationships on suppliers' digital investment decisions.
AB - In the last two decades, digital transformation has been critical for firms' survival and development. Thus, it is important to understand what factors might help facilitate firms' digital transformation. We investigate this problem in the supply chain context by examining whether and how a supplier's major customers influence its digital transformation. Using a sample of Chinese public firms from 2007 to 2020, we document that major customers' level of digital transformation is positively associated with their supplier's level of digital transformation, and the effect is more pronounced when customers are of greater importance to suppliers. The finding holds to a battery of robustness tests. Cross-sectional tests reveal that the impact of customers' digital transformation on suppliers' digital transformation is stronger for suppliers with technology-experienced executives, more high-skilled labor, fewer financial constraints, and narrower digital gap. Moreover, suppliers headquartered in regions with more digital infrastructure also show a more pronounced effect. Further analyses show that the underlying channels through which customers impact their supplier's digital transformation are knowledge transfer and market competition. Finally, we show that suppliers' digital transformation helps increase innovation outcomes. Overall, our paper extends prior literature on the real effects of customer-supplier relationships on suppliers' digital investment decisions.
KW - Digital transformation
KW - Major customers
KW - Relation-specific investment
KW - Supply chain
UR - http://www.scopus.com/inward/record.url?scp=85165019096&partnerID=8YFLogxK
U2 - 10.1016/j.pacfin.2023.102088
DO - 10.1016/j.pacfin.2023.102088
M3 - Article
AN - SCOPUS:85165019096
SN - 0927-538X
VL - 80
JO - Pacific Basin Finance Journal
JF - Pacific Basin Finance Journal
M1 - 102088
ER -