How does supply chain digitization affect green innovation? Evidence from a quasi-natural experiment in China

Digital technology will profoundly impact green innovation by enabling deep supply chain transformation through cost reduction and efficiency gains. Based on a quasi-natural experiment of China's supply chain innovation and application pilot policy, this paper investigates the impact of supply chain digitization on green innovation using data from 1836 listed companies from 2013 to 2021. The results find that: (1) Supply chain digitization significantly promotes firms' green innovation level, a finding that still holds under placebo and other tests. (2) Mechanism tests indicate that supply chain digitization enhances firms' green innovation level mainly through optimizing innovation resource effect, enhancing internal control effect and expanding external demand effect. (3) The green innovation effect of supply chain digitization is greater in regions with low supply chain concentration, capital-intensive, non-polluting industries, and higher digitization degree. (4) Supply chain digitization significantly improves environmental performance through the green innovation effect.