What is it about?

This study investigates the impact of digital transformation on supply chain concentration using data from Shanghai and Shenzhen A-share listed companies between 2011 and 2022. It finds that digital transformation significantly reduces supply chain concentration, with a negative and statistically significant effect at the 1% level. The underlying mechanisms suggest that digital transformation lowers supply chain concentration by enhancing corporate information transparency and improving information acquisition capabilities, allowing firms to better manage and diversify their supply chains. Additionally, the study reveals that the effect of digital transformation on supply chain concentration varies across different companies, depending on both their internal and external characteristics. These findings underscore the importance of digital transformation in fostering supply chain diversification, improving robustness, and supporting sustained profitability, ultimately contributing to the long-term growth and expansion of Chinese businesses.

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Why is it important?

This study is particularly significant because it provides a deeper understanding of how digital transformation influences supply chain dynamics, which is a critical component of firm strategy, especially in the context of China's burgeoning digital economy. As the digital landscape rapidly evolves, companies are increasingly relying on digital tools and technologies to optimize their operations and enhance their competitive edge. The research reveals that digital transformation plays a pivotal role in reducing supply chain concentration, meaning that firms can diversify their suppliers, enhance flexibility, and spread risks across multiple channels. This is essential for companies to remain resilient in the face of disruptions, whether they arise from market volatility, geopolitical tensions, or natural disasters. By improving information transparency and acquisition capabilities, digital transformation allows companies to make better-informed decisions, foster stronger relationships with a wider range of suppliers, and respond more quickly to changes in the market. This leads to a more efficient and resilient supply chain that can better withstand shocks and adapt to shifting demand patterns. Furthermore, the study emphasizes the role of heterogeneity, showing that the extent to which digital transformation affects supply chain concentration varies depending on a company’s specific characteristics, such as its size, industry, and external market environment. The insights from this study are valuable not only for firms in China but also for businesses globally, as they highlight how digitalization can be leveraged to achieve sustainable growth, enhance profitability, and maintain a competitive advantage. In a world where companies are increasingly interconnected and dependent on global supply chains, the ability to reduce concentration and enhance supply chain robustness is more important than ever. Therefore, this research underscores the need for businesses to embrace digital transformation as a strategic tool for long-term success.

Perspectives

This study offers important perspectives on the role of digital transformation in reshaping supply chain management. It highlights that the adoption of digital tools and technologies is not merely a trend, but a crucial factor in enhancing the competitiveness and resilience of companies. The reduction in supply chain concentration, driven by greater information transparency and improved data acquisition, suggests that businesses can mitigate risks and enhance operational flexibility. Moving forward, companies should focus on leveraging digital solutions not only to streamline operations but also to foster greater collaboration with a diverse range of suppliers. From a policy perspective, the findings emphasize the importance of encouraging digital adoption across industries to ensure more robust and sustainable supply chains. Governments and industry leaders can use these insights to support initiatives that promote the integration of digital technologies, ensuring that firms, especially small and medium-sized enterprises, are equipped with the tools needed to remain competitive. Lastly, as digital transformation continues to evolve, future research can explore how emerging technologies, such as artificial intelligence, blockchain, and the Internet of Things, can further enhance supply chain diversification and transparency. This research opens up new avenues for exploring the broader implications of digitalization on global supply chain networks and their ability to adapt to ever-changing market conditions.

Professor ZHAOYANG LU
Southwest University of Political Science and Law

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This page is a summary of: How digital transformation affects supply chain concentration: the case of companies listed on China’s Shanghai and Shenzhen A-share markets, Technology Analysis and Strategic Management, January 2026, Taylor & Francis,
DOI: 10.1080/09537325.2026.2614695.
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