The Impact of the Digital Economy on Supply Chain Security: Evidence from China’s Wooden Furniture Industry

Abstract

Supply chain security is a major prerequisite for China’s successful industrial modernization, while the digital economy has significantly contributed to industrial transformation and upgrading. This study considers China’s wooden furniture industry as its research object, constructing an evaluation index system of the digital economy and supply chain security of the wooden furniture industry. Then, it studies the impact of the digital economy on supply chain security through theoretical analysis and empirical methods using the two-way fixed model of provinces and time. The findings demonstrate that the digital economy effectively enhances the level of supply chain security in China’s wooden furniture industry, further validating the digital economy’s positive externality impact on the traditional real economy. The impact mechanism test shows that inventory turnover capacity is the focal point for the digital economy to improve the supply chain security of the wood furniture industry, specifying the starting point for that industry’s digital transformation. The heterogeneity findings show that the role of the digital economy in improving the wood furniture industry’s level of supply chain security is more significant in inland areas than in coastal areas. Additional analyses found a threshold effect of the digital economy’s impact on supply chain security, indicating its limitations. This study explores the impact of the digital economy on the real economy from a traditional manufacturing industry, enriching research on the positive externalities of the digital economy as well as providing a reference for traditional manufacturing industries, such as that of wooden furniture, to probe the embedding points of the digital economy and appropriate digital transformation.