Digital transformation’s impact on upstream green technology innovation: a supply chain perspective

Enabling greening through digitalization has become an effective way for enterprises to achieve green transformation. Previous studies have not examined whether the digital transformation of businesses contributes to green technology innovation among upstream and downstream enterprises from a supply chain perspective. To fill this gap, this study constructs a supplier – customer – year supply chain relationship sample using data on Chinese listed companies from 2009 to 2020, and applies a two-way fixed-effects model to examine the impact of downstream customers’ digital transformation on upstream suppliers’ green technology innovation. Findings show that customer-driven digital transformation significantly increases suppliers’ green technological innovation, through the action channels of the forcing effect of green transformation, cohort effect of digital transformation, and spillover effect of green technological innovation. Heterogeneity analysis reveals that the effect of customer digital transformation on suppliers’ green technological innovation differs significantly based on different supplier and customer characteristics. Further analysis indicates that the synergy between digitalization and greening created by customer digital transformation can also play a crucial role in enhancing suppliers’ environmental and social governance performance. The findings have significant policy implications for the synergistic development of digitalization and greening of the entire supply chain, with the opportunity to foster sustainable socioeconomic development.