Does Supply Chain Network Centrality Enhance or Impede Firm Innovation: Evidence from China

This study mainly investigates the effects of supply chain network centrality on firm innovation output. We uncover that supply chain network centrality has a negative impact on firm innovation. The negative impact of network centrality on corporate innovation quantity is stronger when economic policy uncertainty is higher and the firm belongs to high-tech industries. Similarly, the detrimental effect of network centrality on corporate innovation quality is magnified when the level of marketization is lower and the firm belongs to high-tech industries. Firms with high supply chain network centrality are associated with more severe short-sightedness, higher transaction costs, and greater operational risks, and thus inhibits firm innovation output.