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How does digital transformation improve supply chain efficiency? Evidence from a-share listed companies in China

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  • Fan, Yun
  • Chen, Xiaoli
  • Guo, Xin
  • Bai, Keke

Abstract

Digital transformation has emerged as a critical driver for improving supply chain management, particularly under the increasing pressures of global competition, uncertainty, and industrial restructuring. As a new production factor, digital transformation not only reshapes traditional business models but also plays a vital role in enhancing supply chain efficiency and resilience. This study investigates its effects by employing a large-scale dataset of 41,657 firm-year observations from Chinese A-share listed companies between 2009 and 2023. Using econometric modeling, we provide robust evidence that corporate digital transformation significantly improves supply chain efficiency. Baseline regressions reveal a strong positive effect, while robustness checks—including difference-in-differences estimation, propensity score matching, and the Heckman two-step procedure—confirm the stability of the findings. Mechanism analysis further shows that digital transformation enhances supply chain efficiency primarily by reducing transaction costs and alleviating customer concentration. The contributions of this paper are threefold: (1) it extends the empirical literature on digital transformation and supply chain management by framing digital technologies as a new production factor; (2) it uncovers the mechanisms through which digital transformation strengthens efficiency and resilience; and (3) it offers practical implications for firms optimizing supply chain operations and for policymakers seeking to promote industrial upgrading and build digital infrastructure.

Suggested Citation

  • Fan, Yun & Chen, Xiaoli & Guo, Xin & Bai, Keke, 2025. "How does digital transformation improve supply chain efficiency? Evidence from a-share listed companies in China," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325018033
    DOI: 10.1016/j.frl.2025.108549
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    References listed on IDEAS

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    1. Li, Pingrui & Zhao, Xu, 2024. "The impact of digital transformation on corporate supply chain management: Evidence from listed companies," Finance Research Letters, Elsevier, vol. 60(C).
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    1. Hoang, Huy Viet & Vu, Giang Thi Minh, 2026. "Does nature dependence drive firms’ supply chain risk?," Economics Letters, Elsevier, vol. 259(C).

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