How Does Corporate Digitalization Affect Circular Supply Chain Management?

Abstract

With the application of digital technologies, the business world is experiencing a disruptive revolution in terms of operations and supply chain management (OSCM). Anecdotal evidence suggests that digitalization is a viable approach for companies to achieve circular supply chain management (CSCM); however, empirical studies remain scarce. In this study, we investigate the digitalization–CSCM relationship by extracting management discussion and analysis texts from the annual reports of 1026 Chinese listed companies over 2009–2021, and measure their level of digitalization using natural language processing based on four types of technologies [i.e., artificial intelligence (AI), blockchain, cloud computing and other digital technologies]. We adopt resource dependence theory as a framework to better understand the relationship between digitalization and CSCM. Firms with higher levels of digitalization perform better in CSCM. AI and cloud computing are more important than blockchain and other digital technologies in improving CSCM. Furthermore, we find that supply chain concentration negatively moderates this relationship. These findings are validated through a series of robustness checks. The study contributes to the OSCM literature by demonstrating the positive impact of digitalization on CSCM and providing an analysis of the OSCM-related moderating effects on this relationship for emerging markets.