Establishing a Big Data Driver for Digital Transformation, Supplier Concentration and Total Factor Productivity in Enterprises

Abstract

Nowadays, various industries are increasingly investing in constructing big data platforms to achieve digitalisation. Digitalisation has become a critical factor in improving the efficiency and effectiveness of enterprises. This paper explores the influence of digital transformation (DIT) on corporate total factor productivity (TFP). Based on data from publicly listed enterprises in China from 2007 to 2022, this paper demonstrates that DIT significantly improves their TFP. Supplier concentration partially mediates the relationship between DIT and TFP. Furthermore, the enterprise life cycle moderates the impact of DIT on TFP. Specifically, during the growth stage, the influence of DIT on TFP is not significant. During the maturity and decline stages, DIT positively affects the TFP. The impact of DIT on TFP is particularly pronounced in enterprises in western China, as well as in large and high-tech enterprises. The paper examines whether, how and when DIT affect TFP. The findings contribute novel evidence that strategic DIT enable enterprise to improve TFP through decreased supplier concentration. For both scholars and practitioners, this research provides valuable insights into how digital transformation can pay dividends by improving overall productivity.