Impact of network nestedness on resistance and recovery of supply chain resilience

Network nestedness, which refers to the hierarchical structure of interconnections within a network, plays an important role in supply chain resilience but remains understudied. We use data from listed firms in China between 2002 and 2022 to construct buyer-supplier networks and measure nestedness using the SNODF metric. We validate SNODF's robustness across varying levels of network completeness. Listed firms are centrally positioned in our networks, making them crucial focal points for analysis. Our empirical results show that network nestedness has a dual effect on supply chain resilience: it weakens short-term resistance to disruptions but enhances long-term recovery. This trade-off arises because hierarchical structures concentrate vulnerability at hub nodes while enabling coordinated resource reallocation after a disruption. We examine two managerial levers that moderate these effects: (1) supplier concentration, an external strategy that attenuates the negative effect on resistance but dampens recovery gains; and (2) corporate digitalization, an internal strategy that mitigates initial losses and enhances recovery. These findings imply that firms should balance two approaches: (1) mitigating risk through supplier diversification to reduce dependence on dominant hubs, and (2) leveraging digital technologies to improve recovery capabilities, thus strengthening long-term resilience.