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Customer digital transformation and enterprise risk-taking: Evidence from Chinese supply chains

Author

Listed:
  • Ding, Yibing
  • Sun, Yining
  • Zhang, Xiaoou

Abstract

The rapid emergence and widespread adoption of digital technology have profoundly reshaped supply chain vertical integration. This study investigates how customer firms' digital transformation influences supplier firms' risk-taking decisions through digital spillovers in supply chains. Utilizing data from Chinese A-share listed companies and their customers from 2009 to 2022, we find that customer digitization significantly enhances suppliers' risk-taking propensity. The impact is asymmetric and stronger when the digitization level of customer exceeds that of supplier. Mechanism tests reveal that the increase in supplier firms' risk-taking ability, due to customer firms' digitization, is achieved through structural synergy (raising the level of supply chain synergy) and resource integration (alleviating suppliers' factor constraints). Heterogeneity analysis shows that the supply chain spillover effects of customer digital transformation are more pronounced when suppliers are non-state-owned enterprises, supply chains span larger geographic distances, the customer concentration is lower, and the digital gap between partners is narrower. Additionally, moderating effect analysis indicates that higher economic policy uncertainty and stronger corporate governance amplify the positive relationship between customer digital transformation and enterprise risk-taking. Further, customer-driven digitization improves suppliers' productivity and innovation. This research advances understanding of supply chain risk governance and offers insights for fostering digital economy and supply chain cooperation.

Suggested Citation

  • Ding, Yibing & Sun, Yining & Zhang, Xiaoou, 2025. "Customer digital transformation and enterprise risk-taking: Evidence from Chinese supply chains," China Economic Review, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:chieco:v:91:y:2025:i:c:s1043951x25000768
    DOI: 10.1016/j.chieco.2025.102418
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    Keywords

    Customer digital transformation; Enterprise risk-taking; Supply chain spillover;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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