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Supply chain finance, green innovation, and productivity: Evidence from China

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  • Gu, Haoran
  • Yang, Shenggang
  • Xu, Zhaoyi
  • Cheng, Cheng

Abstract

This study empirically examines the impact of Chinese A-share-listed companies' application of supply chain finance (SCF) on green innovation by collecting, sorting, and textually analyzing SCF keywords from listed companies' 2.92 million announcements from 2010 to 2019. The results show that applying SCF can significantly increase green innovation output. Alleviating financial constraints, strengthening the supply chain network, satisfying the local government's green enforcement, and building a green image are critical mechanisms through which SCF enhances green innovation. Additionally, accounts-receivable-based and advance-payment SCF could have a more significant effect on green innovation. Furthermore, utilizing SCF can significantly increase firms' productivity, and green innovation has a significant mediating effect. Non-state-owned enterprises have a more significant growth effect on green innovation when using SCF. After using the dynamic DID test, DDD analysis, Heckman selection model, PSM test, placebo test, and other methods to control for potential endogeneity problems, we find that the results of this study remain valid.

Suggested Citation

  • Gu, Haoran & Yang, Shenggang & Xu, Zhaoyi & Cheng, Cheng, 2023. "Supply chain finance, green innovation, and productivity: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:pacfin:v:78:y:2023:i:c:s0927538x23000471
    DOI: 10.1016/j.pacfin.2023.101981
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