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Supply chain ESG and green innovation at midstream firms: An integrated approach with both supplier and buyer sides

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  • Gan, Zhongxin
  • Yusupov, Nurmukhammad

Abstract

We conducted an empirical analysis of the impact of supply chain ESG on corporate green innovation, adopting an integrated approach that considers the ESG scores of both suppliers and buyers. Using firm-level data from China for the period 2009–2022, our results indicate that higher supply chain ESG scores significantly promote green innovation in midstream companies. Disaggregating the ESG performance shows that both suppliers’ and customers’ ESG performance have a significant impact. Mechanism analysis shows that better ESG helps to alleviate financing constraints, improve supply chain efficiency, and stabilize supply-demand relationships. Heterogeneity analysis indicates that high supply chain concentration and shorter distances enhance the positive impact. Furthermore, the environmental and social pillars have a stronger influence on green innovation than the governance pillar, and better ESG performance increases joint green innovation. These findings highlight the importance of considering both sides of the supply chain and adopting a holistic ESG management approach to maximize the potential for green innovation.

Suggested Citation

  • Gan, Zhongxin & Yusupov, Nurmukhammad, 2025. "Supply chain ESG and green innovation at midstream firms: An integrated approach with both supplier and buyer sides," Research in International Business and Finance, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:riibaf:v:78:y:2025:i:c:s0275531925002429
    DOI: 10.1016/j.ribaf.2025.102986
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