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Supplier concentration and operational efficiency during catastrophic risks

Author

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  • Shen, Lu
  • Zhou, Kevin Zheng
  • Ye, Yan

Abstract

Governance for reliability has gained prominence in the post-COVID era. However, it remains unclear whether supplier concentration enhances reliable efficiency amidst supply chain risks, especially during catastrophic risks like the COVID-19 pandemic. Our research leverages the COVID-19 pandemic to assesses the impacts of supplier concentration by analyzing data from 1870 Chinese listed firms from 2017 through 2022. The results reveal a significant decline in operational efficiency as the severity of the pandemic increases, with this decline being more pronounced among firms with high supplier concentration. However, the negative interactive impact of supplier concentration and pandemic severity decreases when firms possess high levels of digitalization or relational ties. These findings highlight the importance of distinguishing between different types of supply chain risks when assessing the impact of supplier concentration and reveals risk-mitigating strategies that firms can adopt to navigate the paradoxical effects of supplier concentration amid catastrophic risks.

Suggested Citation

  • Shen, Lu & Zhou, Kevin Zheng & Ye, Yan, 2025. "Supplier concentration and operational efficiency during catastrophic risks," International Journal of Production Economics, Elsevier, vol. 290(C).
    • Handle: RePEc:eee:proeco:v:290:y:2025:i:c:s0925527325002622
    DOI: 10.1016/j.ijpe.2025.109777
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