The “chain” digital transformation, in which dominant enterprises in the supply chain are “chain masters” and upstream and downstream enterprises participate in it, is an inevitable choice to realize the modernization of the industrial chain. However, there is a huge gap in digital transformation between different enterprises, which restricts the digital collaboration of upstream and downstream enterprises in the supply chain. How to take advantage of the leading role of dominant enterprises in the supply chain and improve the digitalization level of upstream and downstream enterprises is particularly critical.

Using the data of China’s A-shares listed companies from 2007 to 2020, this paper examines the bilateral spillover effect of dominant enterprises in the supply chain on the digital transformation of major suppliers and customers. The results show that the digital transformation of dominant enterprises in the supply chain significantly improves the digitalization level of major suppliers or customers; the main mechanism is that digital transformation promotes the digital technology innovation of major suppliers and the digital asset investment of major customers. Furthermore, the spillover effect on the digital transformation of major suppliers is more significant when dominant enterprises are geographically close to major suppliers, employs common auditors, and are located with high-speed rail services. Finally, the spillover effect of digital transformation improves the efficiency of inventory management in dominant enterprises, with a limited impact on major suppliers or major customers.

The contributions of this paper are as follows: First, in the context of the prominent resource advantages of “chain masters” in the supply chain, it extends the research on the impact of “chain masters” on partners to enterprise digital transformation. Second, from the perspective of ecosystem structure, it examines the bilateral impact of the digital transformation of dominant enterprises on supply chain partners, providing a new perspective for understanding the “chain” digital transformation of enterprises. Third, it provides important policy implications for the government to further improve the joint promotion mechanism of enterprise digital transformation, and for large enterprises to lead the digital transformation of upstream and downstream enterprises in the supply chain.