Effects of supply chain innovation and application policy on firm performance: evidence from China

To accelerate the innovation and application of supply chains, China issued the Supply Chain Innovation and Application (SCIA) policy in 2017. We empirically explored the net and dynamic effects of SCIA policy on firm profitability by applying difference in differences and propensity score matching methods. Results show that SCIA policy significantly promoted firm profitability and it had a dynamic and time-lag effect. For firms in developed regions, SCIA played a more obvious role in promoting firm profitability. Notably, SCIA policy has been more supportive for non-state firms’ profitability than state ones. The results enrich the understanding about the net and dynamic effects of supply chain innovation policies on firm profitability. Accordingly, they not only guide firms on how to perform supply chain innovation and application activities under the new policy, but also provide insights to improve the existing SICA policy.