Supply chain digitalization and corporate green innovation

Supply chain digitalization (SCD) shows potential to enhance firm performance, yet its impact on green innovation remains underexplored. This study uses a panel dataset of listed firms from 2010 to 2022 to investigate the relationship between SCD and corporate green innovation in China. Employing a difference-in-differences approach, we find that SCD significantly promotes green innovation. Further investigation reveals that increased supply chain transparency partially mediates this relationship, whereas board diversity moderates it. Specifically, SCD promotes green innovation both directly and indirectly by increasing transparency, encouraging greener practices. The positive effect of SCD on green innovation grows with board diversity, suggesting that diverse boards can better leverage digital technologies for sustainability. Our heterogeneity analysis uncovers important variations in how firms benefit from SCD: nonlabor-intensive firms show stronger positive responses compared to labor-intensive firms, whereas asset-intensive firms demonstrate the most pronounced benefits from digital transformation. Interestingly, nontechnology-intensive firms show more substantial improvements in green innovation from SCD than technology-intensive firms, suggesting significant potential for digital transformation in traditionally less digitalized sectors. These findings emphasize the importance of considering firm characteristics when implementing digital technologies to drive environmental innovation and gain a competitive advantage in an increasingly sustainability-conscious market.