Digital transformation along the supply chain: Spillover effects from vertical partnerships

Insufficient motivation and limited capacity hinder enterprises' digital transformation. However, research regarding whether an enterprise's digital transformation benefits from supply chain relationships is scant remains unexplored. From a vertical cooperation perspective, we find that the digital transformation of focal enterprises promotes the digital transformation of upstream and downstream enterprises, with a greater spillover impact on upstream suppliers. The mechanism analysis indicates that the digital transformation of focal enterprises enhances suppliers' transformation motivation through a reverse driving effect. Moreover, it enhances the suppliers' transformation ability through knowledge spillover and financing constraint effects, though the latter does not extend to customers. Further study suggests that spillover effects vary across supply chain characteristics. Digital spillovers improve the production-marketing integration and innovation capacity of supply chains. This study provides novel insights into the dynamic interaction of supply chain systems and guides enterprises on utilizing supply chain resources to achieve digital transformation.