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The Side Effect of Supply Chain Digitization on CSR: A Fraudtriangle Perspective

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Du, Ke, Fu Jia, Lujie Chen, and Guanjun Chen. 2023. “The Side Effect of Supply Chain Digitization on CSR: A Fraudtriangle Perspective.” SSRN Scholarly Paper. Rochester, NY: Social Science Reseach Network (SSRN).

Although emerging technologies can be powerful tools to help firms fulfil their environmental responsibilities, there is still a limited understanding of whether and how these technologies contribute to good or bad CSR behaviours. We seek to explore whether emerging technologies can assist companies in fulfilling their environmental responsibilities and develop a framework that examines how supply chain digitization (SCD) leads to a certain side effect—corporate greenwashing (CGW). To do this, we conduct a difference-in-differences analysis to examine the impact of SCD on CGW based on the data of Chinese listed firms from 2012 to 2021. Contrary to the mainstream argument that SCD brings about benefits, our findings, building on fraud triangle theory, indicate that SCD exacerbates CGW. Furthermore, we find that high levels of regional digitalization, a well-balanced combination of environmental regulatory tools, and strong supply chain power can effectively attenuate the main effect. We discuss the potential dark side of digital transformation and contribute to the literature on digital transformation in supply chains and CSR.

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