Digital transformation and green total factor productivity in the semiconductor industry: The role of supply chain integration and economic policy uncertainty

Digital transformation has become a critical factor in reshaping firms towards sustainable development, while how digital transformation affects firm-level green total factor productivity (TFP) in the semiconductor industry remains unclear. This paper examines the relationship between digital transformation and green TFP using a sample of 193 Chinese-listed semiconductor companies from 2007 to 2022. The findings suggest that digital transformation improves green TFP, and the core results still hold after various robustness checks. Digital transformation impacts green TFP mainly through improving resource allocation efficiency and stimulating green technology innovation. In addition, the effect of digital transformation on green TFP can be strengthened by supply chain integration while impaired by economic policy uncertainty. Last, heterogeneous effects across regions are identified, illustrating more pronounced effects in regions with high environmental regulation and marketization and in the eastern areas. The semiconductor companies in the growth and mature stages and non-state-owned companies are more affected. This study demonstrates that digital transformation can drive semiconductor companies' growth and environmental protection, which provides practical suggestions for green transformation.