Exploring the ‘crowding-out’ and ‘empowering’ effects of digital technology spill-overs on supply chain social sustainability

Digital technologies (DTs) are widely regarded as critical enablers of sustainable supply chain management. By using a matched panel of listed customer and supplier companies in China for the 2009–2024 period, this study analyzes the spill-over effect of DTs on social sustainability (SS) in supply chains and elucidates the mechanisms of the relationship. Results reveal the U-shaped spill-over effect of DTs on SS, characterised by the coexistence of crowding-out and empowering effects. Suppliers’ innovation capability and financial constraints, and customer concentration, are the primary mechanisms through which the effect operates. Furthermore, the U-shaped spill-over effect is more pronounced in state-owned suppliers, mature suppliers, and suppliers in competitive industries and non-heavily polluting sectors. Overall, this study extends the literature on DTs within socially sustainable supply chains and provides important managerial insights to firms seeking to advance their SS practices during their digital transformation.