Does the Adoption of Industrial Internet Platforms Expand or Reduce Geographical Distance to Customers? Evidence from China’s New Energy Vehicle Industry

Industrial Internet Platforms (IIPs) provide critical value for supply chain management. The motivation for value creation and capture by supplier firms increasingly depends on acquiring and processing customer-oriented information, with geographical distance to customers being a key factor in assessing costs and benefits. This study investigates whether firms’ IIP adoption increases or decreases the geographical distance to their customers, utilizing supply chain data and digital transformation metrics from China’s A-share listed firms in the new energy vehicle industry. The study finds that an increased adoption level of IIPs by focal firms leads to a greater average geographical distance to their customers. This conclusion remains valid after addressing endogeneity concerns and performing several robustness checks. Moreover, the effect of IIP adoption on expanding the geographic scope of sales is significant when the focal firm is more specialized in the supply chain, more socially embedded, located in China’s eastern region, or acts as an upstream/downstream complement to complete vehicle manufacturers. No significant difference in the impact of IIP adoption is observed between private and state-owned enterprises. This study combines platform innovation and transaction cost theories, offering new insights and policy implications regarding the spatial impact of digital technology adoption in advanced manufacturing and related service industries.