Impact of firm’s supply chain network position on digital transformation: evidence from China

Purpose Given the complexity and increasing interdependence of supply chain networks, a broader perspective beyond a simple binary relationship is needed to analyse the impact of supply chain networks on firms. Based on social network theory, this study aims to explore the relationship between firms’ network position in the supply chain network and digital transformation, as well as the moderating effects of structural holes and network partners’ digitalisation. Design/methodology/approach This study analyses a sample of Chinese A-share companies listed on the Shanghai and Shenzhen Stock Exchanges for the period 2011–2020 using regression analysis to test hypothesised relationships. Findings A firm’s centrality in the supply chain network is positively related to its digital transformation, and that the firm’s structural holes and the level of network partners’ digitalisation can both strengthen the positive influence of network centrality on digital transformation. Moreover, the heterogeneity analysis reveals that the positive effect of firms’ network centrality on digital transformation is more pronounced in non-SOEs and upstream firms. Practical implications In the pursuit of digital transformation, firms should recognise the significance of their position in the supply chain network and enhance their capability for information and resource acquisition by proactively strengthening their business cooperation with other network members. Moreover, firms should emphasise the value of open networks and their partners in supply chain networks. Originality/value This study applies social network theory to investigate the role of a firm’s external supply chain network in its digital transformation, clarifying the context and boundaries in which a firm’s position in the supply chain network influences digital transformation. The results extend the research and theoretical perspective on digital transformation and the consequences of supply chain networks.