Managers' perception of supply chain risk and total factor productivity of enterprises: Opportunity-seeking or loss-aversive?

Management's perception of supply chain risks (SCR) and its corresponding strategies are critical for the survival and development of enterprises in a risky environment. We use textual analysis to construct an index of the risk posed by the supply chain according to the perception of the managers of enterprises, and explore the impact of this perception on total factor productivity (TFP) based on a set of Chinese enterprises listed on the Chinese stock exchange from 2012 to 2021. We claim that enterprises whose managers perceive a higher risk posed by the supply chain have a higher TFP than other companies. Our analysis shows that when managers perceive the risk of the supply chain, they can promote the TFP of their enterprises by investing in human capital, R&D, and digital technologies instead of investing in expansion. The results of a heterogeneity analysis show that the positive impact of the managers' perception of SCR on the TFP of their enterprises is stronger in enterprises located in regions with a higher marketization, have lower constraints on financing, or have managers with a higher risk preference. These results suggest that the “opportunity-seeking effect” of SCR plays a dominant role in Chinese firms.