Driving green transformation along the supply chain: Spillover effects from vertical relationships

With the focus of global attention on carbon emissions shifts from individual enterprises to the entire product lifecycle, enhancing the environmental sustainability of the entire supply chain has become imperative. Using data on the supply chains of Chinese listed companies from 2004 to 2023, this study explores whether a firm’s green transformation benefits from supply chain relationships. We find that focal firms’ green transformation promotes the green transformation of upstream and downstream firms. Mechanism analysis indicates that green innovation diffusion and commercial credit financing drive the main effect. Further analysis demonstrates that these spillover effects are affected by green finance and digital transformation. This study provides valuable insights for creating green supply chain policies and for firms on how to use supply chain resources to make their operations more sustainable.