Does digital transformation foster carbon emissions reduction? Evidence from China’s manufacturing supply chain

Purpose: Scholars and practitioners have long debated carbon dioxide (CO2) emissions reduction via setting double-carbon goals of peak emissions and carbon neutrality in China. Our study, based on dynamic capability and resource dependence theory (RDT), explores whether digital transformation (DT) affects carbon emissions reduction (CER), and the role of operations and supply chain management (OSCM) factors in this relationship. Design/methodology/approach: The samples are constructed with 454 A-shared listed manufacturing firms with complete financial data from 2010–2021. Regression models with fixed effects are applied to estimate the potential parameters. Findings: We find that DT promotes CER. The performance output of CER is strengthened when supplier concentration and customer concentration are high. In contrast, the performance output of CER is weaker when environmental uncertainty is high. Originality/value: The findings of our study enrich the literature on CER in Chinese manufacturing firms and highlight DT and OSCM factors as important drivers influencing CER practices.