Enterprises’ digital transformation investment strategies and supply chain coordination under carbon cap-and-trade policy

Digital transformation (DX) is vital for supply chain performance and environmental goals, yet optimal investment strategies under carbon policies are underexplored. This study examines a two-tier supply chain (manufacturer and retailer) under a carbon cap-and-trade policy, distinguishing between the manufacturer’s production digitization and the retailer’s business digitization. We employ game-theoretic models to analyze equilibrium across unilateral, simultaneous, and centralized DX scenarios, and propose a revenue-sharing and cost-sharing (RC) contract for coordination. The results show that production digitization and business digitization yield synergistic effects, with investment levels higher during simultaneous DX than during separate DX. The proposed RC contract achieves full supply chain coordination, ensuring Pareto improvements for both firms. Environmentally, DX reduces total emissions only when production digitization investment efficiency is sufficiently high. Notably, at moderate efficiency levels, the RC contract simultaneously advances both digitization and greening goals.