Supply Chain Digitalization and its Impact on Green Innovation in Enterprises

Abstract

With the rapid expansion of the digital economy, the application of digital technologies has become an essential strategic choice for enterprise development. Against the backdrop of pollution reduction and carbon mitigation, green innovation has emerged as a crucial pillar supporting corporate sustainability. Drawing on a sample of Chinese A-share listed firms from 2012 to 2022, this study investigates the impact of supply chain digitalization (SCD) on corporate green innovation, distinguishing between substantive and strategic forms of innovation. Building on this framework, the study further examines the mediating mechanisms underlying these effects—with a focus on carbon information disclosure (CID) as a novel mediating pathway. The findings reveal that supply chain digitalization significantly fosters corporate green innovation, with a more pronounced effect on substantive innovation compared to strategic innovation. Moreover, heterogeneity arises depending on ownership structure and firm size, with stronger effects observed in state-owned and large enterprises. Additional analysis indicates that supply chain digitalization enhances substantive green innovation through strengthened carbon disclosure practices, thereby promoting overall corporate green innovation. All regression models include firm, industry, and year fixed effects to control for unobserved heterogeneity, and robustness tests confirm the stability of findings. Purpose: This study aims to empirically examine how supply chain digitalization (SCD) influences corporate green innovation, with a particular focus on distinguishing between substantive and strategic forms of innovation. Furthermore, it explores the mediating role of carbon information disclosure (CID) in this relationship—a mechanism underexplored in prior literature—thereby providing a deeper understanding of how digitalization drives green innovation in enterprises. Design/methodology/approach: Using panel data from Chinese A-share listed firms between 2012 and 2022, the study employs a quasi-natural experimental design based on the designation of pilot enterprises for supply chain innovation (China’s "Supply Chain Innovation and Application Pilot Program," launched in 2018). A difference-in-differences (DID) approach combined with regression models (incorporating firm, industry, and year fixed effects) is applied to estimate the impact of SCD on various dimensions of green innovation. Carbon information disclosure is incorporated as a mediating variable, and heterogeneity analyses are conducted with respect to ownership structure and firm size to assess moderating effects. To mitigate endogeneity, the study leverages the exogenous policy shock of the pilot program, includes comprehensive firm-level controls, and conducts robustness tests. Findings: The results reveal that supply chain digitalization significantly enhances corporate green innovation, with a more pronounced effect on substantive green innovation compared to strategic green innovation. Carbon information disclosure plays a mediating role in this relationship: SCD increases firms’ likelihood of disclosing carbon information, which in turn promotes substantive green innovation but not strategic innovation. The positive effects of SCD are stronger for state-owned enterprises and large enterprises, reflecting their superior resource endowments and strategic orientation toward green development. Robustness tests further confirm the stability of these findings. Research limitations/implications:The study focuses exclusively on Chinese A-share listed firms, which may limit the generalizability of the findings to other contexts. Additionally, the measurement of digitalization and innovation relies on secondary data, which may not fully capture qualitative aspects of internal practices. Future research could employ cross-country comparisons, survey data, or advanced methods such as text mining to explore additional mediating mechanisms (e.g., green absorptive capacity or digital collaboration) and dynamic effects over time. Practical implications: The findings provide actionable insights for managers and policymakers. Firms should actively embed digital technologies into supply chain operations to enhance transparency, reduce information asymmetry, and alleviate financing constraints, thereby stimulating green innovation. Policymakers should expand digital supply chain pilot programs and encourage voluntary carbon disclosure to improve environmental governance. Large and state-owned enterprises should leverage their advantages to lead the construction of green supply chain ecosystems and foster industry-wide sustainable development. Originality/value: This study contributes to the literature by integrating supply chain digitalization into the corporate green innovation framework, distinguishing between substantive and strategic innovation, and identifying carbon information disclosure as a novel mediating mechanism. It enriches the understanding of how digital transformation drives sustainability-oriented innovation and provides evidence-based insights into the heterogeneity of these effects across different types of firms.