The impact of digital technology adoption on corporate supply chain concentration: Evidence from patent analysis

This study examines the association between digital technology adoption and supply chain concentration. Using the detailed patent description data of publicly listed Chinese companies over 2007-2021, we identify the level of digital technology adoption in those companies by machine learning. We find supply chain concentration is significantly lower when the level of digital technology adoption is higher. Results from further analysis suggest the relation between digital technology adoption and supply chain concentration is more prominent when the company, compared to rivals, gains competitive advantage. Meanwhile, the age of the CEO and the industry the firm belongs to influence the relation. Additionally, the adoption of digital technologies significantly improves the performance of listed companies. Overall, this study suggests the incorporation of digital technologies shapes the inter-firm relationship and enriches the understanding of supply chain relationships, which have a profound implication on supply chain management.