Platform Governance and Digital Sustainability: A Systemic Functional Dependency Perspective

The governance of digital platforms is a key factor in sustainable business development. Nevertheless, the specific governance mechanisms through which platforms reconfigure virtual (e-commerce) and physical (logistics) systems, and whether these outcomes are equitable or sustainable, remain insufficiently examined. This research proposes an analytical framework, Systemic Functional Dependency, to elucidate how platform governance shapes the co-evolution of digital and physical activities in the platform economy. The analysis of China’s platform economy from 2013 to 2022 reveals a governance-induced bifurcation: Core regions build sustainable, synergistic business models (local e-com coef. = 0.204, p < 0.05). In contrast, peripheral regions face structural decoupling, where digital-led growth (22.63% CAGR) vastly outpaces the expansion of physical business capacity (6.46% CAGR). This imbalance, caused by a functional transition (32.21% CAGR in net-work-serving logistics vs. 2.44% in local-serving logistics), led to a structural breakpoint in 2017–2018. The findings advance digital business theory by linking platform governance to asymmetric outcomes. This leads to a functional lock-in for peripheral regions, which is a big problem for sustainability and shows how important it is to have governance frameworks right away.