Investment Efficiency–Risk Mismatch and Its Impact on Supply-Chain Upgrading: Evidence from China’s Grain Industry

This study examines how investment efficiency and risk jointly shape sustainable grain supply-chain upgrading. Using firm-level panel data for 25 listed grain supply-chain firms in China from 2015 to 2023, this study examines efficiency–risk structures and their heterogeneity across upstream, midstream, and downstream segments. A three-stage data envelopment analysis (DEA) is applied to measure investment efficiency while controlling for environmental heterogeneity and statistical noise, and a multidimensional investment risk index is constructed using principal component analysis (PCA), with an emphasis on sustainability metrics. The results reveal a clear supply-chain gradient: downstream firms exhibit the highest mean third-stage investment efficiency (crete = 0.633) and scale efficiency (scale = 0.634), midstream firms are intermediate (crete = 0.308; scale = 0.326), and upstream firms remain lowest (crete = 0.129; scale = 0.138). This ordering is also visible year by year, while risk profiles indicate higher exposure upstream and pronounced volatility midstream. Efficiency decomposition shows that upstream inefficiency is mainly driven by scale inefficiency rather than insufficient pure technical efficiency. Overall, efficiency–risk mismatch—manifested as persistent low scale efficiency and elevated risk exposure in upstream, volatility in midstream, and stability in downstream—constitutes a key micro-level barrier to long-term and resilient upgrading. The study thus offers policy-relevant insights for segment-specific interventions that align with sustainable agricultural development: facilitating land consolidation and integrated risk management for upstream scale inefficiency, promoting supply-chain finance and digital integration for midstream risk volatility, and leveraging downstream stability to drive coordinated upgrading and sustainable value creation through market-based incentives.