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The Effect Mechanism of Tie Strength of Supply Networks on Risk Sharing: Based on the Empirical Data of China’s Automobile Manufacturing Industry

Author

Listed:
  • Lina Ma

    (Business School of Jilin University, No. 2699 Qianjin Street, Changchun 130012, China)

  • Min Wan

    (McCoy School of Business, Texas State University, McCoy Hall #552, 601 University Drive, San Marcos, TX 78666, USA)

  • Yushen Du

    (Business School of Jilin University, No. 2699 Qianjin Street, Changchun 130012, China)

Abstract

Based on the research perspective of the cooperation risk and opportunistic risk between supply network enterprises, this article investigates the mechanism of how tie strength between manufacturers and suppliers influences risk sharing among enterprises from two dimensions of tie strength: structural strength and relational strength. In particular, we introduce how asymmetry of dependence moderates the relationship between tie strength and risk sharing. We surveyed China’s domestic auto OEMs and their first-tier suppliers in China through 260 questionnaires and used a hierarchical regression model as a research method to carry out the empirical analysis and test. We found an inverted U-shaped relationship between tie strength and risk sharing among enterprises, and asymmetry of dependence has a significant negative adjustment function on relational strength of the tie and risk-sharing relationship, while there is no significant adjustment function on the structural strength of it. Our findings suggest that keeping moderate tie strength among enterprises is conducive to achieving risk sharing. Moreover, trust and reciprocity is inhibitory regarding the adjustment effect of asymmetry of the dependence influencing relational strength and risk-sharing relationship. However, the structural strength and risk-sharing relationship are not interfered with by the adjustment function of asymmetry of dependence; that is, structural strength plays a decisive role in risk sharing.

Suggested Citation

  • Lina Ma & Min Wan & Yushen Du, 2021. "The Effect Mechanism of Tie Strength of Supply Networks on Risk Sharing: Based on the Empirical Data of China’s Automobile Manufacturing Industry," Sustainability, MDPI, vol. 13(8), pages 1-24, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:8:p:4439-:d:537023
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    References listed on IDEAS

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