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The impact of social capital on major customer supply chain power

Author

Listed:
  • Ullah, G M Wali
  • Cavoli, Tony
  • Khan, Isma
  • Abdullah, Mohammad

Abstract

We investigate the impact of regional social capital on firms' ability to attain bargaining power over their supply chain partners. Using ordinary least squares and instrumental variables estimations, we find a positive relationship between firm-level supply chain power and US county-level social capital. Additionally, we observe this positive effect to be stronger for firms in durable goods manufacturing and the services industry, but not for nondurable goods manufacturers. We conclude that firms headquartered in US counties with high social capital are preferred by suppliers, resulting in greater supply chain power.

Suggested Citation

  • Ullah, G M Wali & Cavoli, Tony & Khan, Isma & Abdullah, Mohammad, 2024. "The impact of social capital on major customer supply chain power," Economics Letters, Elsevier, vol. 238(C).
    • Handle: RePEc:eee:ecolet:v:238:y:2024:i:c:s0165176524002088
    DOI: 10.1016/j.econlet.2024.111725
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    More about this item

    Keywords

    Customer-supplier relationship; Social capital; Supply Chain Power; Major customers;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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