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

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  • Zhang, Tianze
  • Zhao, Xueqi
  • Xi, Yue

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.

Suggested Citation

  • Zhang, Tianze & Zhao, Xueqi & Xi, Yue, 2025. "Greening the chain: How digital transformation of supply chains drives corporate innovation in China's A-share market," International Review of Financial Analysis, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:finana:v:103:y:2025:i:c:s1057521925003114
    DOI: 10.1016/j.irfa.2025.104224
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    Keywords

    Supply chain; Digital transformation; Green innovations;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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