Supply chain digitization and corporate digital innovation: evidence from China

Purpose Supply chain digitization utilizes digital technologies to connect supply chain partners, enhancing the flow of information and collaboration among them. Drawing on the knowledge spillover theory and the institutional theory, this paper aims to empirically investigate the effect of supply chain digitization on corporate digital innovation. Design/methodology/approach This study employs a quasi-natural experimental design to examine the causal effect of supply chain digitization on corporate digital innovation. Utilizing China's 2018 Pilot Supply Chain Innovation and Application as an exogenous policy shock, it constructs a difference-in-differences model and uses Chinese A-share listed firms from 2012 to 2023 as research samples. Findings Supply chain digitization significantly enhances firms' digital innovation outputs. Specifically, supply chain digitization has a more positive effect in firms with a wider supply chain partner base and those with lower initial levels of digital transformation. Furthermore, the effect is stronger in state-owned enterprises, larger firms, capital-intensive industries, and regions with advanced digital infrastructure. Originality/value To the best of the authors' knowledge, this study is the first attempt to empirically identify the causal link between supply chain digitization and corporate digital innovation. It contributes to the literature on the economic consequences of supply chain digitization.