Digital transformation and enterprise performance: supply chain concentration and efficiency

Purpose With the continuous innovation and widespread application of digital technologies, digital transformation offers new opportunities for enterprises to “take the inside lane” and enhance their performance. Based on microdata from Chinese listed companies spanning from 2009 to 2023, this study aims to explore, both theoretically and empirically, the impact of digital transformation on corporate performance as well as the dynamic mechanisms played by supply chain concentration and supply chain efficiency in this transmission process. Design/methodology/approach This study employs a two-way fixed effects model (with industry and time fixed effects) to verify the marginal effect of digital transformation on corporate performance. Additionally, it uses Sobel tests and Bootstrap sampling tests to corroborate the mechanistic roles played by supply chain concentration and supply chain efficiency. Findings This study demonstrates that digital transformation has a significant positive effect on firm performance. Meanwhile, six factors, namely, the nature of enterprise ownership, firm size, factor intensity, industry affiliation, lifecycle stage and geographical location, exert differential impacts on the efficiency-enhancing role of digital transformation. Furthermore, digital transformation can drive firm performance improvement through the mechanisms of enhancing supply chain concentration and supply chain efficiency. Originality/value Firstly, this paper establishes a theoretical analysis framework between digital transformation and firm performance and conducts an empirical test based on microdata from Chinese listed companies spanning from 2009 to 2023. The research findings provide theoretical support and empirical evidence for explaining the positive promoting effect of digital transformation on firm performance, contributing to the further advancement of digital transformation practices in enterprises. Secondly, this paper further considers the differentiation in factors such as the nature of enterprise ownership, firm size, factor intensity, industry affiliation, lifecycle stage and geographical location and delves into the heterogeneous impact of digital transformation on firm performance. This finding aids administrative departments and business managers in formulating more precise measures to address potential shortcomings and challenges in the process of digital transformation. Lastly, based on the extended resource-based view, this study innovatively explores the positive mediating role of supply chain concentration and supply chain efficiency in the process of digital transformation. This finding not only enriches the pathways through which firms can enhance their performance via digital transformation but also offers practical references and insights for improving the success rate of digital transformation.