Environmental regulations and corporate supply chain deviation: Evidence and financial implications for sustainable economic development

Coordination and stability of corporate supply chains are fundamental to sustainable enterprise development. However, the growing pressure for green transformation has rendered environmental regulation an emerging factor influencing supply chain coordination. This study utilizes panel data from 7362 Chinese firms spanning 2008–2022 to examine the impact of environmental regulation on supply chain deviation. Findings indicate that environmental regulation significantly reduces supply chain deviation, which in turn has a positive effect on vertical coordination within the supply chain. This effect demonstrates heterogeneity among firms with different ownership structures, industry classifications, and pollution levels. Mechanism analysis further indicates that regional economic development, government fiscal expenditure, firms' green management innovation capacity, and financing constraints significantly moderate this relation. Moreover, variations in regional industrial structure rationalization, the integration of digital and real economies, and external shocks, such as the China–U.S. trade tensions and the COVID-19 pandemic, have altered the impact of environmental regulation on supply chain deviation.