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Supply network structure and firm tail risk

Author

Listed:
  • Zhuo, Rongsheng
  • Qiao, Zheng
  • Li, Ao
  • Sang, Bo
  • Cai, Yu

Abstract

This paper examines how supply network structure affects financial stability, specifically for systemic tail risks in capital markets. We construct supply networks using data from the top five clients and suppliers disclosed in the annual reports of Chinese A-share listed companies from 2009 to 2022, and measures node-level supply network structure. Our findings indicate that improved supply network structure reduces firms’ systemic tail risks, primarily through information efficiency and risk diversification mechanisms. The effect is more pronounced with heightened analyst and media attention, superior corporate disclosures, closer proximity to clients or suppliers, and fewer financial constraints. This study provides insights into building resilient supply chains and mitigating financial risks.

Suggested Citation

  • Zhuo, Rongsheng & Qiao, Zheng & Li, Ao & Sang, Bo & Cai, Yu, 2025. "Supply network structure and firm tail risk," Research in International Business and Finance, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:riibaf:v:79:y:2025:i:c:s0275531925003514
    DOI: 10.1016/j.ribaf.2025.103095
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    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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