Greening the chain: How digital transformation of supply chains drives corporate innovation in China's A-share market

Abstract

This study examines the effect of supply chain digital transformation (SCDT) on corporate green innovation. We focused on listed companies in China's A-share market from 2007 to 2023, utilizing text analysis to construct an index that measures the digital transformation of corporate supply chains. Our empirical findings indicate that the SCDT significantly increased corporate green innovations. Furthermore, the mechanism analysis suggests that the improvement in net cash flow and the alleviation of financing constraints brought about by the SCDT significantly promote firms' engagement in green innovation. In addition, we find that the effect of supply chain digital transformation on green innovation is pronounced in firms with higher environmental performance, a larger proportion of female executives, and those located in provinces with higher government environmental expenditures.