Decoding Green Innovation Through Multitier Carbon‐Adjusted Supply Chain Complexity

ABSTRACT This study examines whether incorporating carbon‐conscious elements into supplier–firm networks influences the green innovation performance of focal firms, grounded in adaptive theory. We construct a measure of supplier‐to‐firm supply chain complexity that captures horizontal, vertical, and geographic dimensions, explicitly integrating carbon emission considerations. Empirical results indicate that firms situated within more complex supply networks tend to exhibit higher levels of green innovation, and these relationships remain consistent after addressing potential endogeneity. Additional analyses suggest that a firm's strategic orientation and operational flexibility can enhance the positive effect of supply chain complexity, although the magnitude of this moderating role differs across the distinct dimensions. The evidence implies that managerial commitment to R&D and organizational adaptability can help convert the challenges posed by carbon‐intensive, complex supply chains into avenues for environmentally focused innovation and competitive positioning. By introducing a carbon‐adjusted, multidimensional perspective on supply chain complexity, this study offers a framework for understanding how structural and spatial characteristics of supply chains contribute to eco‐innovation outcomes.