Corporate Digital Transformation and Supply Chain Diversification: Evidence from China

Supply chain resilience is critical to the survival and growth of a company. In the digital era, digital technologies enable companies to diversify their supply chains, thus improving supply chain resilience. However, the impact of corporate digital transformation on supply chain resilience has not been studied to our knowledge. Using the data of Chinese A-share private manufacturing companies from 2003 to 2019, we find that corporate digital transformation significantly improves supply chain diversification. To address endogeneity issues, we adopt synthetic difference-in-differences (SDID) method and Bartik instrument variables. Moreover, we reveal that alleviating financing constraints and extending supply chain geographic distance are two channels through which digital transformation improves supply chain diversification. Finally, heterogeneity analysis shows that the effect is more pronounced for industries with higher concentration, large-scale enterprises, and those operating in poor transportation environments. Our research provides a new perspective on improving corporate supply chain resilience.