The transformation to intelligent manufacturing is a crucial pathway for Chinese enterprises to achieve high-quality development and serves as a key strategy for advancing new industrialization and enhancing new productive forces. However, existing literature predominantly focuses on the benefits of smart manufacturing transformation for individual enterprises, including aspects such as total factor productivity, energy efficiency, and cost management, with limited attention to the disparities in transformation progress across enterprises or the spillover effects on upstream and downstream segments of the supply chain.
To address these gaps in the literature,this study empirically examines the supply-chainspillover effects of smart manufacturing transformation using supply-chain relationship data from Chinese A-share listed manufacturing companies between 2009 and 2022, and analyzes the underlying mechanisms driving these effects. First, it develops a theoretical framework centered on "vertical leadership" and "peer group effects". It posits that the transformation to intelligent manufacturing is not only characterized by technological innovation and network externalities, but also generates a closed-loop, synergistic diffusion effect throughout the supply chain via demonstration effects, knowledge sharing, and technology transfer. Empirical results indicate that the intelligent manufacturing capability of focal firms has a significant positive impact on their supply-chain partners; specifically, an increase of one standard deviation in the focal firm′s intelligent manufacturing level is associated with a 7-percentage-point increase in the intelligent manufacturing level of linked firms. Further robustness checks—using first-difference model, controls for industry and regional trends, instrumental variable methods, and difference-in-differences approaches—consistently confirm the robustness and significance of this positive spillover effect.
Then, the mechanism test reveals that key leading firms, particularly those in core supply-chain positions and state-owned enterprises, are more likely to exercise vertical leadership, thereby significantly enhancing the spillover effects of intelligent manufacturing transformation. Moreover, when supply-chain firms share common shareholders, the resultant peer group effect effectively facilitates the transmission of intelligent manufacturing expertise and technological information from focal firms, accelerating the coordinated transformation process among upstream and downstream enterprises.
Moreover, by analyzing the heterogeneity in the propagation direction of supply-chain spillover effects, this study finds that the intelligent manufacturing transformation of focal firms predominantly spills over to upstream suppliers, creating a "reverse pressure mechanism" that compels suppliers to proactively enhance their intelligent manufacturing capabilities to meet the transformation demands of the focal firms. In contrast, the effect on downstream customer firms is not significant, indicating that upstream supply-chain partners face greater pressure and driving forces during the transformation process. Regarding the learning behaviors of supply-chain firms, further empirical tests reveal that when firms are at a disadvantage in intelligent manufacturing within their industry or region, their transformation largely relies on conservative learning strategies—characterized by passive imitation and following—in order to mitigate market risks and swiftly narrow the gaps with more advanced peers; conversely, when conditions for proactive learning exist, this positive effect is not significant.
In summary, this paper provides an in-depth investigation of intelligent manufacturing transformation from the perspective of supply-chain spillovers, thereby supplementing and extending the existing literature on collaborative effects in firm transformation. The study not only reveals the significant positive spillover effect of focal firms′ intelligent manufacturing transformation on their supply-chain partners, but also elucidates the crucial role of core enterprises—particularly those exercising vertical leadership through their dominant positions and state ownership—in promoting overall supply-chain digitalization. Furthermore, the paper highlights that supply-chain firms generally adopt conservative and passive imitation strategies, which offers new insights for small and medium-sized enterprises confronting high-risk transformations. Drawing on these insights, the paper recommends strengthening systematic policy support for intelligent manufacturing transformation, fully leveraging the leading role of flagship and state-owned enterprises, and promoting deep inter-connectivity and information sharing among all supply-chain participants through demonstration projects and cross-sector collaborations, thereby achieving coordinated enhancement and high-quality transformation across the entire industrial chain.