How does knowledge digitization of customer improve the total factor productivity of suppliers: from the supply chain spillover perspective

Abstract

The rapid advancement of digital technology has precipitated a paradigmatic shift in organizational knowledge management, giving rise to the construct of knowledge digitization (KD). Grounded in spillover theory and the knowledge-based view, this study aims to investigate whether and how customer KD generates spillovers for upstream suppliers, as well as the transmission mechanisms and boundary conditions governing this relationship. The study draws on A-share listed companies on the Shanghai and Shenzhen stock exchanges over the period 2009–2023, yielding a final sample of 1,867 annual supplier–customer dyadic observations. Hypotheses are tested using a two-way fixed effects panel data model. The results demonstrate that customer KD exerts a significant positive spillover effect on supplier total factor productivity (TFP) and that this effect is mediated by knowledge transfer (KT) and knowledge co-creation (KC) between the customer and supplier. Moreover, knowledge distance (DS) exerts a positive U-shaped moderating effect for this effect. Heterogeneity analyses show that the spillover effect is more pronounced among state-owned and large-scale suppliers. This study extends spillover theory into the domain of digital knowledge by demonstrating that customer KD restructures the supply chain knowledge flow regime. It advances KD research from an intra-organizational to an inter-organizational level of analysis, identifies a dual-channel mediation mechanism that distinguishes unidirectional transfer from bilateral co-creation and theorizes a U-shaped boundary condition that reframes DS from a uniform barrier into a new moderator whose effect is overcome by KD’s distinctive properties.