Against the backdrop of accelerating restructuring of global industrial and supply chains, ensuring the security and stability of supply chains has become a critical factor in achieving high-quality macro- economic development. As a demand-side stimulus instrument, the impact of government procurement on supply chain stability remains to be thoroughly examined.

Taking China’s A-share listed companies from 2015 to 2022 as a sample, this paper empirically investi- gates the impact of government procurement on corporate supply chain stability. The results show that government procurement has a significantly positive impact on supply chain stability. Mechanism testing reveals that government procurement promotes supply chain stability by mitigating the financial risk, reputation risk, and supply chain volatility risk of firms. Heterogeneity analysis indicates that the chain-stabilizing effect of government procurement is more pronounced among firms with lower risk tolerance and greater supply chain coordination difficulty. Further analysis shows that government procurement mainly strengthens the supply chain stability of downstream firms in the industrial chain and, based on this stabilizing function, further generates a spillover effect in terms of innovation upgrading and employment stability.

This paper makes the following marginal contributions: First, it extends the economic value effect of government procurement as a demand-side intervention. Using purchase order data released by the China Government Procurement Network, this paper investigates the impact of government procurement on supply chain stability, thereby enriching existing research in this field. Second, it contributes to the literature on the deter- minants of supply chain stability. By examining government procurement as a market-based policy instrument and analyzing its chain-stabilizing effect, this paper provides new insights into the mechanisms through which government procurement affects supply chain stability, thus broadening the scope of prior studies. Third, it offers theoretical support for strengthening supply chain stability, preventing and mitigating systemic risks, improving employment environments, and enhancing the efficiency of the real economy.