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From shared stakeholders to strategic linkages: The impact of common ownership on supply chain diversification

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  • Li, Ying
  • Zhao, Chen

Abstract

Firms are interconnected through two large networks: the supply chain and common ownership networks, yet the interaction between them is underexplored. This paper investigates how common ownership shapes the supply chain structure. Using the supplier information of Chinese listed firms and institutional shareholding data during 2006–2023, we find that a 1% increase in a firm’s aggregate ownership overlap with others is associated with a 0.47 percentage point reduction in its purchase share from the top 5 suppliers and a 0.034% reduction in purchase concentration among them. Further, common ownership contributes to supply chain diversification as the ownership overlap between firms encourages them to form new supply-chain linkages and helps strengthen these linkages. Two important mechanisms behind this are reduced transaction costs and improved information transparency.

Suggested Citation

  • Li, Ying & Zhao, Chen, 2025. "From shared stakeholders to strategic linkages: The impact of common ownership on supply chain diversification," Research in International Business and Finance, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:riibaf:v:80:y:2025:i:c:s0275531925003228
    DOI: 10.1016/j.ribaf.2025.103066
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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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