Digital-enabled supply chain innovation and CO2 emissions: The contingent role of first-tier supplier's structural holes

Abstract

The literature on sustainable supply chains primarily delves into how lead firms manage the CO2 emissions of various tiers of their suppliers by employing market-oriented solutions like incentives and monitoring practices. This lead firm perspective often overlooks the role played by technology-oriented solutions in CO2 emissions management along the supply chain by the first-tier suppliers. In this paper, we combine a network approach with the perspective of first-tier suppliers, proposing that digital-enabled supply chain innovation among the first-tier suppliers leads to a reduction in their CO2 emissions. However, the presence of structural holes in their downstream (customer) supply chain weakens this effect, while structural holes in their upstream (supplier) supply chain strengthen it. We provide empirical support for our arguments through an analysis of 2631 publicly listed Chinese firms from 2012 to 2019. This study makes valuable contributions to the literature on sustainable supply chains.