Nonlinear effects of digital transformation on the geographical distribution of supply chain partners

Using a sample of Chinese listed firms from 2010 to 2024, this study finds an inverted U-shaped relationship between digital transformation and supply chain distance. That is, distance initially expands as digitalization increases but contracts at advanced levels of digitalization. The mechanism analysis reveals that risk perception is a common channel affecting both supplier and customer distance, whereas business concentration operates primarily on the supplier side. Further analysis shows that digital transformation has a U-shaped effect on geographical concentration and an inverted U-shaped effect on coverage breadth.