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How Does Digital Transformation Facilitate Enterprise Total Factor Productivity? The Multiple Mediators of Supplier Concentration and Customer Concentration

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  • Hua Zhang

    (Sunwah International Business School, Faculty of Economics, Liaoning University, Shenyang 100136, China)

  • Qiwang Zhang

    (Business School, Faculty of Economics, Liaoning University, Shenyang 100136, China)

Abstract

Nowadays, no organization or sector is immune to the influences of digital transformation. It has been generally recognized as a significant promoter of corporate efficiency and effectiveness. However, the literature on whether and how digital transformation can facilitate corporate total factor productivity is scarce. In this case, this paper aims to empirically investigate whether and how digital transformation can boost a firm’s total factor productivity. Using a sample of Chinese listed companies from 2007–2020 and structural equation model analyses in STATA 16.0, this paper identifies that (1) digital technology, one dimension of digital transformation, has no significant effects on enterprise total factor productivity, while digital application, the other dimension of digital transformation, can directly enhance enterprise total factor productivity; (2) both digital technology and digital application can indirectly boost enterprise total factor productivity through the decreasing of supplier concentration; and (3) digital technology adversely affects enterprise total factor productivity through the increasing of customer concentration, and digital application may positively affect enterprise total factor productivity through the decreasing of customer concentration. Our study is one of the first to explore the mediating effect mechanism of the relationship between digital transformation and enterprise total factor productivity from the perspective of supply chain management.

Suggested Citation

  • Hua Zhang & Qiwang Zhang, 2023. "How Does Digital Transformation Facilitate Enterprise Total Factor Productivity? The Multiple Mediators of Supplier Concentration and Customer Concentration," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:3:p:1896-:d:1040592
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    Cited by:

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    2. Guoen Xia & Zenghui Yu & Xuwu Peng, 2023. "How Does Enterprise Digital Transformation Affect Total Factor Productivity? Based on the Information Intermediary Role of Analysts’ Attention," Sustainability, MDPI, vol. 15(11), pages 1-22, May.
    3. Ayadi, Imen & Abderrahman, Jahmane, 2025. "The impact of economic policy uncertainty and digital integration on ESG practices in European companies," Research in International Business and Finance, Elsevier, vol. 76(C).
    4. Shan Wu & Ying Li, 2023. "A Study on the Impact of Digital Transformation on Corporate ESG Performance: The Mediating Role of Green Innovation," Sustainability, MDPI, vol. 15(8), pages 1-17, April.
    5. Teng, Yuqiang & Du, Anna Min & Lin, Boqiang, 2024. "The mechanism of supply chain efficiency in enterprise digital transformation and total factor productivity," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    6. Dongfeng Chen & Junpeng Wang & Bin Li & Huihui Luo & Guangming Hou, 2025. "The Impact of Digital–Green Synergy on Total Factor Productivity: Evidence from Chinese Listed Companies," Sustainability, MDPI, vol. 17(5), pages 1-40, March.
    7. Meixuan Zhang & Zongsheng Huang, 2024. "The Impact of Digital Transformation on ESG Performance: The Role of Supply Chain Resilience," Sustainability, MDPI, vol. 16(17), pages 1-20, September.
    8. Wang, Jie & Wang, Jun, 2024. "“Booster” or “Obstacle”: Can digital transformation improve energy efficiency? Firm-level evidence from China," Energy, Elsevier, vol. 296(C).
    9. Tiantian Ning & Kai-Hua Wang & Hong-Wen Liu, 2025. "Unleashing the Power of Digital Transformation: Boosting Green Total Factor Productivity in China’s Energy Enterprises," Sustainability, MDPI, vol. 17(9), pages 1-19, May.
    10. Jiang, Weijie & Li, Jiaye, 2024. "Digital transformation and its effect on resource allocation efficiency and productivity in Chinese corporations," Technology in Society, Elsevier, vol. 78(C).
    11. Yan Ping & Wu Yingqin & Wu gang & Wasi Ul Hassan Shah, 2025. "Economic efficiency evaluation, regional technological heterogeneity, and total factor productivity change in the industrial sector of China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-18, December.

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