Purpose: This study conceptualizes the digital transformation (DT) strategy in a supply chain context, identifies its drivers from intra- and inter-organizational perspectives and examines the effect of the DT strategy on the strategic agility and financial performance of Chinese manufacturing firms.Design/methodology/approach: The authors constructed a theoretical model by synthesizing the diffusion of innovation and organizational information processing theory (OIPT) and provided a set of hypotheses. The authors empirically tested the arguments using partial least squares structural equation modeling using data from a sample of 200 manufacturing firms in China.Findings: The findings indicate that while supply chain connectivity positively affects DT adoption and DT routinization, data analytics capability and organizational learning positively influence DT adoption but not DT routinization. The mediation analysis also shows that DT strategy has significant direct effects on financial performance and a stronger indirect influence on financial performance via improved strategic agility.Research limitations/implications: This study responds to repeated calls for a new understanding of supply chain DT strategy. In addition, the study offers important contributions to the literature by identifying the potential discord between the existing DT strategy and the supply chain context and proposes a new framework that provides essential theoretical underpinnings.Originality/value: This study enriches the literature by conceptualizing and validating the dimensions, driving factors and performance implications of DT strategy in strategic supply chain management.

Small and medium-sized enterprises (SMEs) in both the manufacturing and service sectors have been viewed as an important driving force behind the rapid economic growth in China. There are multiple factors that drive the success of SMEs. In this paper, we study the effect of innovation culture, technological capability, and organization size on the performance of SMEs in China. We hypothesize that firm performance is positively affected by each of these factors. We use data from 1124 SMEs in China and apply regression analysis to test our hypotheses. We find that technological capability and organization size have a statistically positive effect on the performance of SMEs. Because manufacturing and service industries have distinct characteristics, we also compare the effects of these factors on firm performance within these industries. We find that technological capability is positively and statistically significantly related to firm performance in the manufacturing industry but not in the service industry, while innovation culture is positively and statistically significantly related to firm performance in the service industry but not in the manufacturing industry.

Successful companies depend on the development and integration of innovation and productivity. Incorporating theoretical insights based on the absorptive capacity of the firm, we examine the relationship among absorptive capacity, labour productivity, and firm performance. Based on a mediating model linking absorptive capacity to firm performance via labour productivity within an international context, we find that labour productivity plays a partial mediating role between absorptive capacity and firm performance. By highlighting the mediating influence, this research provides empirical evidence of how firms increase operational efficiency to enhance performance and build competitive advantage.

Supply chain finance (SCF) has attracted considerable attention being an innovative business model that allows firms, especially small- and medium-sized enterprises (SMEs), to convert illiquid assets into cash without incurring additional liabilities. However, its effects on SME performance and risk have been insufficiently studied. The competitiveness of SMEs depends on performance enhancement and risk mitigation. Thus, this study constructs a scaled-decile rank transformation of account receivable turnover to gauge the degree to which a supplier implements SCF, thereby examining the relationship between SCF, performance, and risk. We collect data on 4,679 SMEs from the Chinese manufacturing sector. Thereafter, hierarchical linear regression, a complex form of multiple linear regression analysis, is employed to test the hypotheses. The results indicate that an SME’s SCF adoption positively impacts its performance but negatively impacts its risk. To further explore cross-sectional variability, we investigated the buyer-supplier relationship’s moderating role. Results show that an increase in customer concentration strengthens both the positive effects of SCF on performance and the negative effects of SCF on risk. Overall, our study contributes to the literature on the interface of operations and finance in supply chains by exploring the multiple facets of SCF adoption and highlighting the moderating role of buyer-supplier relationship in SCF and SME competitiveness. Finally, we provide managerial implications for SMEs and financial service providers by validating the value of SCF implementation and the buyer-supplier relationship management in forging competitive advantages.

The global COVID-19 outbreak has led to significant challenges for supply chain management, while insights on how to configure the supply chain network to respond to this crisis are limited. Therefore, the present research extends the understanding of supply chain resilience by investigating whether supply chain concentration has influenced the shock of COVID-19 on firm performance. This study assesses four sub-dimensions of supply chain concentration: supplier, customer, product, and region. Based on a large-scale sample of Chinese listed manufacturing firms, we employed a difference-in-difference approach to investigate whether supply chain concentration ameliorated or exacerbated the shock of COVID-19. The results indicate that treatment groups (firms with lower supplier, customer, product, and region concentration) have experienced a considerably more significant performance deterioration than control firms. Overall, this study paves the way for future research and offers vital insights into the redesign of supply chains in response to COVID-19 and similar crises.