ABSTRACT This paper investigates the impact of supply chain risks on corporate innovation in China. Our findings indicate that firms with high supply chain risks are more inclined towards incremental innovation rather than breakthrough innovation. This relationship is further strengthened by high customer concentration and strong financial constraints, and it is more pronounced in industries characterized by higher levels of competitiveness and within the high-tech sector. Furthermore, the influence of supply chain risks on corporate innovation is jointly driven by supply and demand risks. Crucially, strategic adjustments in response to supply chain risks not only improve operational performance but also enhance the stability of customer relationships.