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Corporate digital transformation and cash flow volatility: An empirical analysis from a supply chain perspective

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  • Lan, Mudan
  • Huang, Yuhong

Abstract

Focusing on Chinese listed firms, this study explores how customer firms’ digital transformation influences suppliers’ cash flow volatility from a supply chain perspective. The results show that customer digitalization significantly increases supplier cash flow volatility: a one-standard-deviation increase in customer digital transformation leads to a 0.291-standard–deviation increase in volatility. Asymmetry tests show that the effect is significant only when the customer firm is larger than the supplier or when the supplier relationship is unstable. We identify two plausible mechanisms underlying this effect: digital spillover and supply‒demand mismatch. This study contributes to the literature by deepening the understanding of the economic effects of digital transformation within supply chains.

Suggested Citation

  • Lan, Mudan & Huang, Yuhong, 2025. "Corporate digital transformation and cash flow volatility: An empirical analysis from a supply chain perspective," Finance Research Letters, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pb:s1544612325012437
    DOI: 10.1016/j.frl.2025.107985
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