Supply Network Position and Firm Performance: Evidence From Chinese Listed Manufacturing Companies

Abstract

The aim of this paper is to examine the relationship between supply network position and firm performance. A-share manufacturing companies listed from 2013 to 2015 are chosen as the initial samples, and large sample supply networks are constructed with relational embeddedness and structural embeddedness. The location of supply network is depicted by network centrality and structural hole with social network analysis, and the influence of supply network position on the corporate performance is examined with multiple OLS regression analysis. This paper observes that a firms’ supply network position is an important factor affecting its performance. The higher the network centrality is, the richer the structural holes are, and the worse the company’s performance is. The results suggest that firms that have a high level of centrality or rich structural holes in their supply networks will gain limited information, resource and control benefits and face great business risks that may negatively influence their performance.

Uncertainty shocks, network position, and inventory

“…In methodology, this paper is closely related to studies in finance that investigate how financial performance and decisions are influenced by an industry’s position in the industry (Ahern and Harford, 2014; Aoibda et al , 2014; Shi et al , 2019; Chae et al , 2022; Evgeniou et al , 2022). For example, Ahern and Harford (2014) find that merger activities in one industry transmit through input–output network to its closer industries before they transmit to its distant industries.…”

Application of Digital Technology in Disruptive Innovation

“…In recent years, scholars have made many researches on the relationship between "digital technology and enterprise innovation capability". On the one hand, enterprises can use the data integration and analysis advantages of digital technology [1] (Shi Bingzhan, Li Jiantong, 2020) to change the way of enterprise value creation and acquisition [2] (Nambisan S et al, 2019), achieve factor empowerment [3] (Qilei Liu et al, 2021), and thus enable production innovation [4] (Abrel T et al, 2016). On the other hand, digital technology can improve the accuracy of information searching and analyzing [5] (Zhu Qin, 2019), and eliminate the structural barriers of enterprise employees in obtaining information, opportunities and resources [6] (Maomao Chi, 2020), so as to improve the accurate analysis of market demand (Qin Zhu, 2019).…”