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The impact of digital technology adoption on corporate supply chain concentration: Evidence from patent analysis

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  • Zhou, Huiyang
  • Wang, Ruzhou
  • Zhang, Xiyu
  • Chang, Minyen

Abstract

This study examines the association between digital technology adoption and supply chain concentration. Using the detailed patent description data of publicly listed Chinese companies over 2007–2021, we identify the level of digital technology adoption in those companies by machine learning. We find supply chain concentration is significantly lower when the level of digital technology adoption is higher. Results from further analysis suggest the relation between digital technology adoption and supply chain concentration is more prominent when the company, compared to rivals, gains competitive advantage. Meanwhile, the age of the CEO and the industry the firm belongs to influence the relation. Additionally, the adoption of digital technologies significantly improves the performance of listed companies. Overall, this study suggests the incorporation of digital technologies shapes the inter-firm relationship and enriches the understanding of supply chain relationships, which have a profound implication on supply chain management.

Suggested Citation

  • Zhou, Huiyang & Wang, Ruzhou & Zhang, Xiyu & Chang, Minyen, 2024. "The impact of digital technology adoption on corporate supply chain concentration: Evidence from patent analysis," Finance Research Letters, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:finlet:v:64:y:2024:i:c:s1544612324004434
    DOI: 10.1016/j.frl.2024.105413
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    Cited by:

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    3. Weiwei Fu & Junyi Feng & Giray Gozgor, 2025. "The Impact of Biodiversity Risk on Supply Chain Strategy: Evidence From the Chinese MNEs," Business Strategy and the Environment, Wiley Blackwell, vol. 34(8), pages 9637-9651, December.
    4. Chen, Wenpeng & Wang, Jiaqi & Wang, Shan, 2025. "Economic uncertainty, digital transformation, and firm supply chain disruption risk," Economics Letters, Elsevier, vol. 255(C).
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    7. Cao, Qinwei & Qian, Yu & Zhong, LinFeng & Meng, Qiaoyu, 2026. "Dual regulatory mechanisms and boundary conditions of digital transformation on open innovation: A supply chain dynamic characteristics perspective," Technology in Society, Elsevier, vol. 84(C).
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    9. Yu, Haipeng & Cheng, Xiaoke & Sun, Qian & Shen, Xiaotian, 2025. "Does vertical integration reduce the cost of equity?," International Review of Financial Analysis, Elsevier, vol. 97(C).
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    11. Li, Jian & Yi, Mei & Sun, Qing, 2025. "Artificial intelligence and supply chain risk: Mediating effects of supply chain efficiency and resilience," International Review of Financial Analysis, Elsevier, vol. 108(PA).
    12. Zhu, Xiang & Chen, Hongtao & Xiang, Erwei & Qi, Yingjin, 2025. "Digital transformation and corporate green technology transfer: The moderating effect of executive green cognition," Finance Research Letters, Elsevier, vol. 76(C).
    13. Han, Liangliang & Wang, Yunqiao & Sun, Jiaqi & Sun, Zheyu, 2025. "How does digital technology application affect tax compliance?," Finance Research Letters, Elsevier, vol. 85(PB).
    14. Shi, Xiuping & Liu, Hao, 2025. "How does digital supply chain transformation enhance sustainable performance of renewable energy enterprises?," International Review of Economics & Finance, Elsevier, vol. 103(C).
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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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