The Influence of Supply Chain Innovation and Application Policy on Green Total-Factor Energy Efficiency: Evidence from Chinese Prefecture-Level Cities

Abstract

Climate change and mounting energy pressures have placed green energy efficiency at the centre of sustainable development agendas worldwide. Although the role of digital technologies in transforming supply chains has received growing scholarly attention, the specific policy mechanisms through which supply chain digitalization shapes green total-factor energy efficiency (GTFEE) at the urban level in emerging economies remain insufficiently understood. To address this gap, this study evaluates the causal effect of China’s Supply Chain Innovation and Application (SCIA) pilot policy on GTFEE in 276 prefecture-level cities over 2012–2023. Employing a difference-in-differences (DID) design augmented with city and year fixed effects, and robustness checks using Double/Debiased Machine Learning (DDML), propensity score matching (PSM-DID), and instrumental variable (IV) estimation, we find that SCIA pilot designation raises GTFEE relative to non-pilot cities. Mechanism analyses reveal that green technological innovation may serve as a potential mediator of this effect. Heterogeneity analyses further show that the policy generates significantly stronger impacts in eastern and central regions—where digital infrastructure and institutional capacity are more developed—while western cities exhibit no statistically significant response. These findings extend resource dependence theory and the Porter Hypothesis to the urban supply chain digitalization context, and offer actionable policy insights for designing place-sensitive green supply chain interventions.