How digital input enhances firm supply chain resilience: firm-level analysis from China

Identifying the factors that drive industrial chain resilience is crucial for enhancing supply chain stability when confronted with global disruptions. This study aims to explore how digital input influences industrial chain resilience by focusing on its impact on firms’ output flexibility and its underlying mechanisms. This study analyses a sample of Chinese A-share listed companies from 2007 to 2022. The findings demonstrate that digital input significantly enhances firms’ output flexibility, thereby strengthening their capacity to respond to external shocks. Additionally, this study identifies two key mechanisms – technological complementarity and collaborative efficiency – through which this enhanced flexibility is propagated across the entire industrial chain. Heterogeneity analysis reveals that the positive impact of digital input is more pronounced in industries with lower market concentration, in the tertiary sector, among state-owned enterprises, and in sectors with lower technological activity. These findings provide new empirical evidence for enhancing industrial chain resilience and offer valuable insights for policymakers and enterprises in implementing digital transformation strategies to improve resilience and adaptability amid external shocks.